Kuber Investors has introduced a scheme of investment called as “SHRI LAMXMI”. As per the scheme you have to invest 50,000/- as the start of five year investment period and your returns at the end of each year for next five years will be 10,000/-, 11,000/-, 12,000/-, 13,000/- and 15,000/-. The indicated rate of interest is 10% and Present Value @ 10% for first five years are: 0.9091, 0.8264, 0.7513, 0.6830 and 0.6209 respectively.
You are required to compute present value of investment and advise regarding the profitability of the investment. (MU, BMS, Apr. 2011)
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