LECTURE 08

Numericals
 ■ What do you mean by Benefit-Cost ratio? Compute Benefit-Cost Ratio
for a project at 12% discount rate, given the following costs and
benefits. Is the project worth to accept?
Years Capital cost Operating cost Production Gross Benefits
cost
0 6000 - -  
1 7500 - - 5000

2 6000 - - 5000
3 - 600 700 6000
4 - 600 700 6000
5 - 600 700 6000
6 - 600 700 6000
7 - 600 700 6000
Salvage Value - - - 331
 Q.1. Find NPV at 8% if the costs and benefits are given below
 

Year 0 1 2 3 4 5 6 7 8 9 Salva
ge
value

Initial 1000 - - - - - - - - - -
Cost 0
Operati - 300 300 300 300 300 300 300 300 300 -
ng Cost

Gross - 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000
Benefits
Find the NPV/IRR/BCR at 14%
discount rate, given the following
costs and benefits.

Years 0 1 2 3 4 5 6
Gross Costs 200 800 700 500 500 500 50
0 0 0 0 0 0 00

Gross Benefits 0 0 600 100 100 100 10

0 00 00 00 00
0
Find NPV/BCR/IRR at 8% if the costs and benefits are given below
 

Year 0 1 2 3 4 5 6 7 8 9 Salv
age
valu
e

Initial Cost 10000 - - - - - - - - - -

Operating Cost - 300 300 300 300 300 300 300 300 300 -

Gross Benefits - 1500 2000 2500 3000 3500 4000 4500 5000 550 6000
0