AS is evaluating a project that is expected to generate the following cash flow stream:
Expected cash flow
Now -R 100,000
End-of-year 1 R 50,000
End-of-year 2 R 50,000
End-of-year 3 R 50,000
2.1. If the project's cost of capital is 12 per cent, what is the present value of the project's expected cash flow stream?
2.2. What is the net present value of the project?
2.3. What is the profitability index of the project?
2.4. Should the project be undertaken? Explain.
Project should be accepted as Net Present Value ,is positive ,Also... View the full answer