Determine which is the most profitable

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Rajan textiles is considering two investments each of which requires an initial investment of Rs. 18,00,000. The total cash inflow, that is profits after taxes and depreciation charges, for each project are

Year              1             2           3           4                5               6           7

Project X    30,000    50,000   60,000   65,000  40,000  30,000    16,000

Project Y    60,000    1,00,000    65,000  45,000

Question 1: Rajan's cost of capital is 8% Rank these investments by their excess present value. Which is the most profitable?

Reference no: EM132490209

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