Find out the pay back period and discounted pay back period

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Question 1: Find out the Pay back period and Discounted Pay back Period Net Present Value of a project that needs an initial cash outlay of Rs.1,80,000 that can be borrowed @ 12% rate of interest. The project life is 5 Years and the scrap value of the project at the end of 5th year is Rs.20,000. The project has the following estimated cash inflows at the end of each year for five years.

Year                                    Cash Inflows

1                                         30000

2                                         50000

3                                        70000

4                                        80000

5                                        60000

Question 2: Find out the project to be selected through IRR out of the following three mutually exclusive projects that needs an initial cash outlay of Rs.2,000,000 and that can be borrowed @ 16% rate of interest. The project life is 5 Years. The project has the following estimated cash inflows at the end of each year for five years.

Year                 Cash Flows Project A                         Cash Flows Project B                     Cash Flows Project C

0                            -2000000                                       -2000000                                  -2000000

1                                400000                                             800000                                     600000

2                                 500000                                             700000                                      600000

3                                  600000                                            600000                                         600000

4                                     700000                                            500000                                    600000

5                                        800000                                            400000                                  600000

Reference no: EM132609094

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