YEAR PROJECT A PROJECT B RATE 11%

0 -100000 -100000
1 32000 0 INITIAL CASH OUTFLOW
2 30000 0
3 32000 0
4 35000 0
5 45000 200000

NPV ₹ 26,336.52 ₹ 18,690.27 ₹ 26,336.52

IRR 20% 15%

PAYBACK PERIOD
PROJECT A
CASH INFLOWS CUMILATIVE VALUE OF CASH INFLOWS CASH INFLOWS
32000 32000 0
30000 62000 0
32000 94000 0
35000 129000 0
45000 174000 200000

PAYBACK PERIOD 3YEARS+(6000/45000) PAYBACK PERIOD

3.133333333

PROJECT A WILL BE CHOOSEN AS IT HAS A HIGHER NPV, HIGHER IRR AND A LOWER PAYBACK PERIOD.
 0.11

100000

PROJECT B
CUMILATIVE VALUE OF CASH INFLOWS
0
0
0
0
200000

WER PAYBACK PERIOD.

Q3
SALES(units) 25000
interst per annum 30000
selling price per unit 24
tax rate 50%
variable cost per unit 16
no.of equity shares 10000
fixed cost 80000

sales 600000 BREAK EVEN POINT 240000

(variable cost) 400000
contribution 200000 EBIT 120000
(fixed cost) 80000
EBIT 120000 EPS 4.5
(interest) 30000
EBT 90000 OL 1.666667
(tax rate) 45000
EAT 45000 FL 1.333333
Q5
A LTD B LTD C LTD
IRR 15% 10% 8%
KE 10% 10% 10%
EPS 10 10 10

DIVIDEND PAYOUT RATIO 0 8

A LTD B LTD C LTD

DIVEDEND PAYOUT RATIO(DPR) 8 10 0
DIVEDEND PAID 80 100 0
PRICE PER SHARE (P) -250 11000 0
10
Q4

X LTD
12% DEBT 500000 EBIT 300000 300000
(INTEREST) 60000 0
ASSETS 1500000 EBT 240000 300000
EARNING RATE 20% KE 18% 18%
EBIT 300000 E(EQUITY) 1333333 1666667
INTEREST 60000 D(DEBT) 500000 0
V(VALUE OF COMPANY) 1833333 1666667
KO 0.163636 0.18
 EBIT 300000 300000
(INTEREST) 60000 0
EBT 240000 300000
KO 18% 18%
V(VALUE OF COMPANY) 1666667 1666667
D(DEBT) 500000 0
E(EQUITY) 1166667 1666667
KE 0.205714 0.18