One of Digital Vibes' projects, code named "Project Thunderbolt" will incur R30 000 in cost during year 0 and will produce R10 000 in net cost savings to the company in years 1 through 6.

i. What would the net present values be for this project for 15% and 20% required rates of return? (5)

ii. Calculate the Profitability Index for Project Thunderbolt at 15% and 20% required rates of return (5)

b. Digital Vibes' "Project Bird-in-Hand" project will require an initial investment of R1.5 million and will result in a payment of R2 million from the client at the end of three years. If the required rate of return is 8%, what is the NPV for this project? (5)

c. Digital Vibes is considering implementing a new CRM (Customer Relationship Management) system for its facilities in Johannesburg and Cape Town. The initial cost of the project will be R500 000 and the system is predicted to have a useful life of five years. The annual cost of maintaining the system will be R20 000, but it will increase revenues by R100 000 per year. What can we conclude about this potential project? (5)

d. Your company is trying to decide whether to invest in a new product development opportunity based on the following information. The initial cash outlay (product development cost and launch cost) will total R250 000 over two years. The company expects to invest R200 000 (product development cost) immediately and the final R50 000 (launch cost) in one year's time. The company predicts that the project will generate a stream of earnings of R50 000, R100 000, R200 000, and R75 000 per year, respectively, starting in Year 2. The required rate of return is 12%, and the expected rate of inflation over the life of the project is forecast to remain steady at 3%.

i. Based on the above information, should you invest in this project? Apply an appropriate financial model to evaluate the above case for economic viability. (8)

ii. Given that the probability of success for the above product development project are 80% in development and 60% in the market, calculate the expected commercial value (ECV) for this project. (6)

b. Classify the above project in Question (a) using Obeng's model and discuss the importance and/or usefulness of project matrixes such as Obeng's model in Project Portfolio management.