Question: Question 3 [12 marks] Question 3.1 (6 marks - 7.5 minutes) The Department of Human Settlements has contacted Ubuntu builders to provider plumbing services. Ubuntu

Question 3 [12 marks] Question 3.1 (6 marks - 7.5 minutes)

Question 3 [12 marks] Question 3.1 (6 marks - 7.5 minutes) The Department of Human Settlements has contacted Ubuntu builders to provider plumbing services. Ubuntu builders has bought a machine to manufacture geysers to fulfil its contractual obligation with the Department of Human Settlements. The geyser manufacturing machine has a life span of five years and will be sold for a scrap value of R400000 at the end of its life. Ubuntu builders generate revenue by selling geysers to the Department of Human Settlements. The required rate of return on the geyser manufacturing machine is 8%. Calculate the net present value (NPV) of the project and advise Ubuntu builders whether they should accept or reject the project based on the NPV

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