The situation
Closing integration costs are ₹10 crore. Plan A yields ₹6 crore in each of years one and two. Plan B delivers the entire ₹12 crore in year two. Use 10%.
Your task
Which plan creates more value?
Reveal step-by-step solution
Set up the problem
Plan A NPV = −₹10 + ₹6 ÷ 1.10 + ₹6 ÷ 1.10² ≈ ₹0.41 crore.
Work through the numbers
Plan B NPV = −₹10 + ₹12 ÷ 1.10² ≈ −₹0.08 crore.
Interpret the result
Earlier realization adds about ₹0.50 crore. Plan A clears the hurdle under the stated assumptions.
What to remember
Discount cash by realization date and keep one-time integration spending visible.