What is the net present value of the project

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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

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. What is the net present value of the project?

3. What is the profitability index of the project?

4. Should the project be undertaken? Explain.

Reference no: EM131975527

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