Name Yashaswini

Roll No 23b4epgp113
Section B Rs in cr

Problem NTT Software purchase Intial cash flow for TT -100

Cash flows
1 ₹ 17.00
2 ₹ 19.55
3 ₹ 22.48
4 ₹ 25.85
5 ₹ 29.73
npv of the ₹ -10.41

npv of the
project at
different
growth
rates
annual sale 0.1 0.2 0.3
cash flows
1 ₹ 17.00 ₹ 17.00 ₹ 17.00
2 ₹ 18.70 ₹ 20.40 ₹ 22.10
3 ₹ 20.57 ₹ 24.48 ₹ 28.73
4 ₹ 22.63 ₹ 29.38 ₹ 37.35
5 ₹ 24.89 ₹ 35.25 ₹ 48.55
npv of the ₹ -18.33 ₹ -1.75 ₹ 17.99

npv of the
project at
different
project
cost -100 -200 -300
cash flows
1 ₹ 17.00
2 ₹ 19.55
3 ₹ 22.48
 4 ₹ 25.85
5 ₹ 29.73
npv ₹ -10.41 ₹ -110.41 ₹ -210.41

TT should not purchase the software from the ST, Only if sales growth ra
annual
sales
growth
rate 0.15

cost of capi 0.08

₹ -10.41

0.1 -₹ 10.41
0.2 -₹ 10.41
0.3 -₹ 10.41

₹ -10.41

-₹ 100.00 -₹ 10.41
-₹ 200.00 -₹ 10.41
-₹ 300.00 -₹ 10.41
 npv of the
project at
varying
growth
rates and
varying
project
₹ -10.41 0.1 0.2 0.3 cost
-100 -10.41 -10.41 -10.41
-200 -10.41 -10.41 -10.41
-300 -10.41 -10.41 -10.41

the ST, Only if sales growth rate is 30% or more , they can go with the software