The Damodar Company is considering two mutually exclusive projects with different lives. The costs (

The Damodar Company is considering two mutually exclusive projects with different lives. The costs (cash flows) of the projects are given below:

                           Cash Flows (Rs ’000)

           Project        C0              C1              C2              C3              C4  

           X                150              30               30               30               30  

           Y                 75               40               40                                        

      The discount rate is 10 per cent. Which project should be selected and why?

 

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