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Use the following information to answer questions 59 to 68. Work with TWO decimal places throughout these questions. Assume you have a project with an initial cost of R4 500. The estimated life of the project is 3 years and the project will be depreciated to zero using the straight-line method. However, the project's equipment is estimated to be sold at the end of the project for R1 000. There will be an initial decrease in accounts receivable of R1 000, which will be restored at the end of the project's life. The net income before taxes and depreciation amounts to R2 000 per annum. The applicable tax rate is 28% and the required rate of return is 25%. Use the following cash flow (CF) template to assist you in answering the questions. To show a cash outflow, indicate a -R in front of your answer when entering it on the quiz. Year 0 1 2 3 Q59 Q59 Q59 Q60 Q61 OCF Change in NWC Capital spending Total CFs Q62 Q63 Q64 Q65 Q65 Q66 59 Calculate the Operating Cash Flow (OCF) relevant for Years 1 to 3. (22) 60 (22) 61 (22) Determine the change in Net Working Capital to be recorded for Year 0. Determine the amount of Net Working Capital to be recorded for Year 3. Determine the amount of Capital Spending to be recorded in Year 0. Calculate the amount of Capital Spending to be recorded for Year 3. 62 (12) 63 (72) 64 Calculate the Total Cash Flow for Year 0. (12) 65 (12) 66 (22) Calculate the Total Cash Flow applicable for both Years 1 and 2. Calculate the Total Cash Flow for Year 3. Calculate the Net Present Value (NPV) of this project. Based on your answer to question 67, select the correct option: 67 (2) 68 (122) A. B. C. D. The firm should accept the project since the NPV is positive. The firm should accept the project since the NPV is negative. The firm should reject the project since the NPV is positive. The firm should reject the project since the NPV is negative

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