Question: 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

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

Required:

2.1. If the projects cost of capital is 12 per cent, what is the present value of the projects

expected cash flow stream?

2.2. What is the net present value of the project?

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