Question 1 16 Marks Consider a project with the following cash flows: Consider a project with the...

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Finance

Question 1 16 Marks
Consider a project with the following cash flows:
Consider a project with the following cash flows:
Year Cash Flow
0 R17,500
1 -80,500
2 138,425
3 -105,455
4 30,030
Required: 1.1.Fill in the following table:
Cost of Capital (%) Project NPV
0
5
10
15
20
25
30
35
50
1.2.Use the values developed in part (1.1) to draw an NPVprofile for this project.
1.3.What is the IRR for this project?
1.4.Describe the conditions under which the company should acceptthis project.

Answer & Explanation Solved by verified expert

4.3 Ratings (762 Votes)

11 NPV calculated using NPV functionYear n01234Cash Flow17500 80500 138425 105455 30030Cost of capital See Answer

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Transcribed Image Text

Question 1 16 MarksConsider a project with the following cash flows:Consider a project with the following cash flows:Year Cash Flow0 R17,5001 -80,5002 138,4253 -105,4554 30,030Required: 1.1.Fill in the following table:Cost of Capital (%) Project NPV05101520253035501.2.Use the values developed in part (1.1) to draw an NPVprofile for this project.1.3.What is the IRR for this project?1.4.Describe the conditions under which the company should acceptthis project.