7. T Ltd. is looking for a capital project in order to replace its existing old machine. It got two proposals to consider; details of which are given below: Proposal X Proposal Y Initial investment ` 6,50,000 ` 7,80,000 Estimated useful life 5 Years 3 Years Annal cash inflows ` 1,90,000 ` 3,50,000 Cost of capital 10% 10% Year 1 2 3 4 5 PVIF0.10, t 0909 0.826 0.751 0.683 0.621 PVIFA0.10, t 0.909 1.736 2.487 3.170 3.791 What will be Equivalent Annual NPV for Proposal X and Proposal Y?
Options
A` 70,290.00, ` 90,450.00
B` 18,541.28, ` 36,369.12
C` 1,90,000.00, ` 3,50,000.00
D` 77,326.73, ` 99,504.95
(2 Marks)
For any discrepancies in this question, email contact@cadada.in