Determine the payback period of a project with a cost

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Reference no: EM132671954

Capital budgeting

Problem 1: An initial investment on machinery of R5000 is expected to generate cash inflows of R3000 , R4000 ,R5000 and R6000 at the end of the first , second ,third and fourth year respectively. calculate and interpret the NPV of the investment if the discount rate id 15%.

Problem 2: Determine the Payback period of a project with a cost of R100 000 and a required rate of return of 14%. the project will have estimated future cash flows of R20 000 , R30 000 , R100 000 and R120 000 at the end of the first , second , third and fourth year respectively. show all your calculations, including the cumulative cash flow.

Reference no: EM132671954

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