System Analysis and Design20825 marksNumerical: discounted payback period NPVProcess of Initiating and Planning IS Development Projects,
An initial investment of Rs. 5,00,000 is required to start a company. The cash flow-in is Rs. 60,000 per year. Assuming the interest rate as 15%, calculate the discounted payback period. (use Net Present Value)
An initial investment of Rs. 5,00,000 is required to start a company. The cash flow-in is Rs. 60,000 per year. Assuming the interest rate as 15%, calculate the discounted payback period. (use Net Present Value) [5]
Parameter Value ------ Initial Investment ($I0$) Rs. 5,00,000 Annual Cash Inflow ($Y$) Rs. 60,000 Discount Rate ($i$) 15% = 0.15 --- $$PVn = Y \times \frac{1}{(1+i)^n} = 60{,}000 \times \frac{1}{(1.15)^n}$$ Year (n) Discount Factor $1/(1.15)^n$ Discounted Inflow (Rs.) Cumulative Discounted Inflow...