B. Ltd. is considering a project requiring initial outlay of ₹ 5 Lac. The expected cash inflow from operation is ₹ 85,00

[answerhappygod]

B. Ltd. is considering a project requiring initial outlay of ₹ 5
Lac. The expected cash inflow from operation is ₹ 85,000 annually
for 15 years. Cost of capital is 18%.
The consultancy group believe that the Govt. is considering
change in its industrial policy. Under this, they shall have an
option of making further investment of ₹ 1 lac at the end of 4th
year. The new investment will result in CFAT of ₹ 85,000 for year 5
to 15. Value the option.