Financial Analysis

Assumptions
Price ₹100/Unit
Total Initial Investment ₹1,71,41,700
(Cost of equipment+Working
capital+Additional Investment)
Total Cost Includes Fixed and Variable Cost
Life of equipment 10 years
Rate of depreciation(Straight-Line method) 10%
with 0 salvage value

Units produced initially and growth rate 1,50,000 units @ 5% growth rate
Discount rate and Tax rate 10% and 25% respectively
Total Cash Inflow ₹3,84,39,547.35
 Financial Analysis

Approach Conditions Results

Net Present Value ₹2,12,97,847.35 Accept

(Positive)

Internal Rate of Return 17% Accept

(IRR>Discount rate)

Profitability Ratio 1.242 Accept

(PR>1)