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The case study presents a problem where a firm is evaluating two investment projects (A and B) with the following data provided:

- **Cost of capital (Discount Rate)**: 10%
- **Investment in both Projects A & B**: ₹2,00,000

### Cash inflows for each project:

| Year | Project A (₹) | Project B (₹) |
|------|---------------|---------------|
| 1    | 40,000        | 90,000        |
| 2    | 60,000        | 80,000        |
| 3    | 80,000        | 60,000        |
| 4    | 1,00,000      | 20,000        |
| 5    | 1,20,000      | 16,000        |

The tasks are:
1. Compute the **Net Present Value (NPV)** at 10%.
2. Compute the **Internal Rate of Return (IRR)** for the two projects.
3. Additionally, compute the **NPV** for Project A with a discount rate of 20% and Project B with 10% and 15%.

### Let's start by calculating the NPV and IRR for Project A and B at a 10% discount rate.

I will first compute the NPV for each project. Let me proceed.The Net Present Values (NPV) of the projects at a 10% discount rate are:

- **NPV for Project A**: ₹88,867.50
- **NPV for Project B**: ₹16,607.78

Next, I will compute the **Internal Rate of Return (IRR)** for both projects, which is the discount rate at which the NPV becomes zero. I'll proceed with these calculations now.It seems like I can’t do more advanced data analysis right now. Please try again later. However, I can guide you through the process of manually calculating the **Internal Rate of Return (IRR)** and provide more detailed explanations on how to do it.

Would you like to proceed with a manual method or explore other questions related to the analysis? 

Here are some additional questions to consider:
1. How is NPV different from IRR in evaluating projects?
2. What is the significance of using different discount rates for NPV?
3. What would be the outcome if the cash inflows were spread differently?
4. Can the IRR for a project be negative? What would that indicate?
5. How would the NPV change if the cost of capital were higher than 10%?

Tip: IRR is the discount rate that makes the NPV of a project zero. You can solve it iteratively or use financial calculators/spreadsheets for faster calculations.

A firm whose cost of capital is 10% is considering two projects (A & B) with an investment of ₹2,00,000 in each. The cash inflows over 5 years are provided for both projects. The task is to compute the Net Present Value (NPV) at 10% and the Internal Rate of Return (IRR) for both projects. Additionally, compute the NPV for Project A at 20% and for Project B at 10% and 15%.

Learn how to calculate the Net Present Value (NPV) and Internal Rate of Return (IRR) for two investment projects with cash inflows over five years. This case study involves different discount rates (10%, 15%, and 20%), making it suitable for finance and business students.

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