Question 1 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...

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Finance

Question 1

Consider a project with the following cash flows:

YearCash Flow
0R17,500
1-80,500
2138,425
3-105,455
430,030

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 shouldaccept this project.

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Transcribed Image Text

Question 1Consider a project with the following cash flows:YearCash Flow0R17,5001-80,5002138,4253-105,455430,030Required: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 shouldaccept this project.

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