Amount in $Million

a) Alpha :

Particular Year 0 Year 1 Year 2

Initial Investment -10

After - Tax Cash Flow 3.5 3.5
Discounting Factor 12% 0.893 0.797
Cash outflow after discounting factor 3.1255 2.7895
Total -10 3.1255 2.7895
Net NPV 0.633000000000001

Delta :

Particular Year 0 Year 1 Year 2

Initial Investment -10

After - Tax Cash Flow 2.5 2.5
Discounting Factor 12% 0.893 0.797
Cash outflow after discounting factor 2.2325 1.9925
-10 2.2325 1.9925
Net NPV -2.405

ECHO:

Particular Year 0 Year 1 Year 2

Initial Investment -10

After - Tax Cash Flow 6.5 3
Discounting Factor 12% 0.893 0.797
Cash outflow after discounting factor 5.8045 2.391
-10 5.8045 2.391
Net NPV 0.9675
Year 3 Year 4

3.5 3.5
0.712 0.636
2.492 2.226
2.492 2.226

Year 3 Year 4

2.5 2.5
0.712 0.636
1.78 1.59
1.78 1.59

Year 3 Year 4

3 1
0.712 0.636
2.136 0.636
2.136 0.636