Scribd Logo
Upload

Welcome to Scribd!

  • Investment Analysis Problem

    Uploaded by

    Sarvesh JP Nambiar
    20 views1 page
    The farmer is considering purchasing a mini tractor for Rs. 2,50,000 that will have annual maintenance costs of Rs. 18,000 for years 1-5 and Rs. 21,000 for years 6-10. The annual returns are estimated to be Rs. 2,98,400 for years 1-5 and Rs. 2,08,000 for years 6-10. The assistant should advise the farmer on the economic viability of purchasing the mini tractor using various measures like profitability ratio, net present worth, benefit-cost ratio, internal rate of return, and modified internal rate of return assuming an opportunity cost of capital of 11% per year. The assistant should also recalculate the BCR, NPW and

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The farmer is considering purchasing a mini tractor for Rs. 2,50,000 that will have annual maintenance costs of Rs. 18,000 for years 1-5 and Rs. 21,000 for years 6-10. The annual returns are estimated to be Rs. 2,98,400 for years 1-5 and Rs. 2,08,000 for years 6-10. The assistant should advise the farmer on the economic viability of purchasing the mini tractor using various measures like profitability ratio, net present worth, benefit-cost ratio, internal rate of return, and modified internal rate of return assuming an opportunity cost of capital of 11% per year. The assistant should also recalculate the BCR, NPW and

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    20 views1 page

    Investment Analysis Problem

    Uploaded by

    Sarvesh JP Nambiar
    The farmer is considering purchasing a mini tractor for Rs. 2,50,000 that will have annual maintenance costs of Rs. 18,000 for years 1-5 and Rs. 21,000 for years 6-10. The annual returns are estimated to be Rs. 2,98,400 for years 1-5 and Rs. 2,08,000 for years 6-10. The assistant should advise the farmer on the economic viability of purchasing the mini tractor using various measures like profitability ratio, net present worth, benefit-cost ratio, internal rate of return, and modified internal rate of return assuming an opportunity cost of capital of 11% per year. The assistant should also recalculate the BCR, NPW and

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    A farmer wants to purchase a mini tractor at the cost of Rs. 2,50,000.

    The annual cost of


    maintenance and returns for the mini tractor are estimated at Rs. 18,000 and Rs.2, 98,400
    respectively till the end of fifth year. Thereafter the same was Rs. 21,000 and Rs.208000 till
    the end of its life period (i.e. 10 t h year). Advise the farmer about the economic viability of the
    purchase of power tiller using Profitability ratio, NPW, BCR, IRR and modified IRR (the
    opportunity cost of capital is 11 per cent per annum). Workout BCR, NPW and IRR when the
    expenditure increases @ 2 per cent and returns decreases by 1 percent.

    You might also like