Reference no: EM133113224

After completing your post-graduation, you have a plan to start your own venture of manufacturing customized gift packaging wooden boxes. The initial market research suggests that the project will require an initial capital investment of Rs. 500,000. You are required to give a forecasted plan of cash flows for next five years (assuming the venture life as five years) and evaluate the project using the method which suits best in your opinion. Following additional information is given:

1. Assume the revenue for first years as per your opinion
2. Assume the growth rate in revenues to be 5%
3. Assume the operating cost for all the five years as per your understanding
4. Calculate depreciation on straight line basis.
5. Tax rate may be taken as 30%
6. Give your plan of raising capital and accordingly calculate weighted average cost of capital.