Please answer question 5.

5.1 REQUIRED

Use the information given below to calculate the Net Present Value (NPV) of the project. Ignore taxes. Calculate the net cash flows for each year, the present values and NPV. (10 marks)

INFORMATION Markram Limited is considering the manufacture and sale of economy power inverters.

The following information is available:

New machinery needs to be purchased at a cost of R8 000 000. A scrap value of R200 000 is expected.

It was predicted that the project would have a four-year life, and the pattern of sales would be as follows:

Year 1	3 500 units
Year 2	6 500 units
Year 3	4 100 units
Year 4	1 500 units

The selling price and manufacturing costs per unit are expected to be R2 000 and R1 100 respectively.

Annual non-manufacturing costs of R100 000 per annum are expected to be paid for each of the four years.

The company's cost of capital is assumed to be 15%