Procter and Gamble $($Pty$)$ LTD$,$ the world's largest consumer goods company and home to iconic, trusted brands, wants to expand their footing into the African market. They are considering opening a branch in Johannesburg with the following expected US$ denominated cashflow. The cost of capital is pegged at $8\%.$

$\backslash$table$[[$Year$,$Cash flows $($$$)],[0,900000],[1,250000],[2,250000],[3,275000],[4,125000],[5,535000]]$

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The table below can be used or a financial calculator

As the Finance and Marketing manager calculate the following:

a$)$ Payback period $(8)$

b$)$ Net Present Value $(8)$

c$)$ Internal Rate of Return $(3)$

d$)$ Explain the difference between the Net Present Value, Payback Period and Internal Rate of Return. Rank the methods in terms of preferability $(6)$

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Bo$0$kIISts: $2024$ Semester

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a$)$

b$)$

$\backslash$table$[[$Year$,$Cashflows,PVIF $(8\%),$NPV$],[0,,1,],[1,,0\mathrm{.}9259,],[2,,0\mathrm{.}8573,],[3,,0\mathrm{.}7938,],[4,,0\mathrm{.}7350,],[5,,0\mathrm{.}6806,],[,,,]]$