Ngaged (Pty) Ltd bought a piece of land worth R1.8 million last year. This year, the company intends to develop the land in order to commence generating future cash flows from the land. It will cost the company R550 000 to develop the land. eNgaged (Pty) Ltd has the option to lease the land out this year and generate rental cash flows of R25 000 per month. Identify the relevant cash flows that eNgaged (Pty) Ltd would need to take into account upon deciding whether to develop the land. 

• (i) Purchase price (R1.8 million) of the land
• (ii) The cost of developing the land (R550 000) 
• (iii) The monthly rental cash flows (R25 000) 

(ii) and (iii) only 

(i) and (ii) only

(i), (ii) and (iii)

(i) only

Answer rating: 100% (QA)

The relevant cash flows that eNgaged Pty Ltd would need to take into account are ii The cost of deve... View the full answer