Year Combined cash outflow Proportion

1987 -100 0.24

1988 -250 0.61
1989 -60 0.15
-410

Profit calculation when no competition

Hot rolled Cold rolled
Selling Price 306.5 390.5
Cost 225 283
Margin 81.5 107.5

Quantity 500,000 350,000

Profit 40,750,000 37,625,000
Total profit 78,375,000

Profit calculation when competition is present

Hot rolled Cold rolled
Selling Price 306.5 390.5
Cost 265 323
Margin 41.5 67.5

Quantity 500,000 350,000

Profit 20,750,000 23,625,000
Total profit 44,375,000
Cash outflow for CSP
-75
-190 Year 1987 1988 1989 1990 1991 1992
-45 No Comp -75 -190 -45 78.4 78.4 78.4
-310 Comp -75 -190 -45 78.4 78.4 44.4

NPV
Without compe ₹52.39
With competit (₹46.22)

78.375

44.375
1993 1994 1995 1996 1998 1999
78.4 78.4 78.4 78.4 78.4 78.4
44.4 44.4 44.4 44.4 44.4 44.4