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Cash outflow = 25000 (initial investment) Cash inflow= 12000 Present value of cash inflow at 8% for 3 years= 12000*2.577 = Rs 30,924 We know that Net present value= total cash inflow- total cash outflow Substituting values: =30,924 - 25000 = Rs. 5924 We can see that NPV is positive. Thus, the project is feasible.