The projected cost of a new plant is given below (all numbers in R10⁶)

Land Cost = R10 

Fixed Capital Investment excl. Land = R150 (R100 at end of year 1, R30 end of year 2, and R20 at end of year 3)

Working capital = 30% of FCI (at start-up)

Start-up at end of year 3 

Revenue from Sales - R65

Cost of Manufacturing (without depreciation) = R25

Tax Rate -28% Depreciation method double decline balance method (no salvage value and 5 years equipment life)

Length of time over which profitability is to be assessed 10 years after start-up Internal rate of return = 11%p.a.

(a) Draw a cumulative (discounted) after-tax cash flow diagram (to be uploaded as a file)

(b) From part (a), calculate the following discounted profitability criteria for the project:

(i) Net present value (Given in R-rounded to nearest RI)

(ii) Discounted payback period (years - rounded to 2 decimals i.e. 5.23)

(iii) Discounted cash flow rate of return (DCFROR) (%-rounded to 1 decimals i.e. 13.1%)

You may be required to answer some other questions relating to the generated Table so please have similar headings as the table on page 17 of your Economic Evaluation Notes 4.