Mojela, a movie producer, and director at Mzansi Studios is considering investing R12 000 in an...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Mojela, a movie producer, and director at Mzansi Studios is considering investing R12 000 in an Al project to improve the creative and writing skills of his team. The Department of trade and Industry has agreed to finance the project if Mojela pays upfront R5 000 into the project. The project will generate the following cash flows: YEAR 2 3 4 5 REVENUES R 20 000 22 000 22 000 22 000 25 000 Mojela requires a minimum rate of return of 8%. EXPENSES 18 000 19 000 20 000 17 000 17 000 Required: 1.1. Calculate the net present value of the investment? Would you recommend that Mojela continue with this project? Substantiate your answer. 1.2. Determine the project's payback period? 1.3. Distinguish between the NPV method and payback period. Mojela, a movie producer, and director at Mzansi Studios is considering investing R12 000 in an Al project to improve the creative and writing skills of his team. The Department of trade and Industry has agreed to finance the project if Mojela pays upfront R5 000 into the project. The project will generate the following cash flows: YEAR 2 3 4 5 REVENUES R 20 000 22 000 22 000 22 000 25 000 Mojela requires a minimum rate of return of 8%. EXPENSES 18 000 19 000 20 000 17 000 17 000 Required: 1.1. Calculate the net present value of the investment? Would you recommend that Mojela continue with this project? Substantiate your answer. 1.2. Determine the project's payback period? 1.3. Distinguish between the NPV method and payback period.
Expert Answer:
Answer rating: 100% (QA)
11 To calculate the Net Present Value NPV of the investment well discount each years cash flows to present value using Mojelas required rate of return ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
A 3D-printing company called Proways makes two types of shoes: Sneakers (S) and Flats (F) using a single 3D-printer. The 3D-printer is available for 800 minutes per day. Sneakers require 10 minutes...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
Write a function that checks if a word is in a list. If the word is in the list, then return the position of the word in the list. If the word is not in the list then print an error message.
-
To eliminate service inconsistencies, companies rely on ___________ and ___________.
-
Find the third and fourth distribution matrices for the given stochastic matrix and initial distribution. (Round entries to two decimal places.) 1. 2. 1.5 .6 .3 .9 .5 [.7 .5Jo
-
Presented below are two independent situations. 1. On January 1, 2014, Delgado Company issued $500,000 of 8%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and...
-
How is the iterative nature of preparing financial forecasts significant? How long does the financial forecasting wheel need to turn before the financial forecasting process is complete?
-
In 2004 the Keenan Company paid dividends totaling $3,600,000 on net income of $10.8 million. 2004 was a normal year, and for the past 10 years, earnings have grown at a constant rate of 10 percent....
-
Review | Constants Scaling laws apply not just to organisms but also to entire ecosystems. (Figure 1) shows the number of trees in a 5 acre section of tropical forest with the trunk diameters shown...
-
a. Tables 1 through 5 contain the financial information describing the effects of level production on inventory, cash flow, loan balances, and interest expense. Reproduce these tables as if Tim's...
-
XYZ company pays the following dividends over the past 4 years. If the firm's dividend per share next is expected to be $3.02, what is the company's intrinsic share price if the rate of return is 13%...
-
Driving a car in London just got a lot more dangerous. A soon-to-be-completed skyscraper in the downtown area is having an impact that no one could have imagined: it is starting fires and melting...
-
In recent years there has been a surge in the construction of large dams in both developing and developed countries including Brazil, Ethiopia, Pakistan, and China. There are several reasons for this...
-
Explain basic properties of Legendre's polynomials.
-
Go to www.informationweek.com/whitepaper/Management/ROI-TCO/managing-risk-an-integrated-approacwp1229549889607?articleID=54000027 and access the article on Managing Risk: An Integrated Approach....
-
Go to http://pmworldlibrary.net/ and type case studies in the search window. Select a project and report on it from the perspective of its cost estimation, budgeting, and (if applicable) expediting...
-
Cassie pays for her daughters college education by depositing $X into a fund at the beginning of each month for 20 years. The fund earns i = 0.07. Lori withdraws $35,000 from the fund at the...
-
The ultimate goal of Google, Bing, and other consumer search engines is to provide users with search listings that contain useful information on the topic of their search. What recommendations would...
-
How attuned are the organization to the need to increase efficiency, quality, innovation, or responsiveness to customers? How well do you think the organization performs its prime goals of providing...
-
Go to Chipotles webpage (www.chipotle.com) and click on Company. Then click on Development. Return to the main page and click on Food with Integrity. Watch one (or more) of the videos posted to this...
-
Given what you have learned in this chapter, design a plan to increase the motivation of clerks to provide prompts service to customers even when they are not being watched by a partner.
-
What are the elements of a master budget?
-
How would the budget-setting philosophy of a service provider differ from that of a manufacturing business?
-
What are the advantages and disadvantages of a bottom-up approach to budgeting?
Study smarter with the SolutionInn App