Question: 1. Study the table below. a. What is the payback period for Project X? (3 marks) CAPITAL EXPENDITURE DATA FOR PROJECT X Initial Investment Year

1. Study the table below. a. What is the payback

1. Study the table below. a. What is the payback period for Project X? (3 marks) CAPITAL EXPENDITURE DATA FOR PROJECT X Initial Investment Year 1 R1 000,00 Expected Cash Inflows Year 2 Year 3 Year 4 R2 000,00 R2 000,00 R5 000,00 R10 000,00 Year 5 R2 000,00 b. Now assume the company wants to select between Project X and Project Y, of which the latter has a payback period of three years and 10 months. Which project should be selected? The initial investment remains the same for both projects. Explain. (4 marks) 2. Conduct a discounted cash flow calculation to determine the NPV of the following project, assuming a required rate of return of 0.2. The project will cost $75,000 but will result in cash inflows of $20,000, $25,000, $30,000, and $50,000 in each of the next 4 years. Can you invest in this project? Support your answer. (8 marks)

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