The Ambani has two alternative proposals under consideration. Project Ghee requires a capital outlay of Rs. 25,00,000 and Project Oil requires Rs.50,00,000. Both are estimated to provide a cash flow for five years:
Project Ghee Rs. 9,00,000 per year and Project Oil Rs. 17,50,000 per year. The cost of capital is 14%. Show which of the two projects is preferable from the view point of
(i) Net present value method (ii) Profitability Index. write all these in simple mathematical way
Mathbot Says...
I wasn't able to parse your question, but the HE.NET team is hard at work making me smarter.