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1.XYZ limited has project which is expected to yield the following cash flows: Years Cashflows 1-4 10,000 5-11 15,000 12-17 20,000 18-Infinity 30,000 The annuity

1.XYZ limited has project which is expected to yield the following cash flows:

Years Cashflows

1-4 10,000

5-11 15,000

12-17 20,000

18-Infinity 30,000

The annuity between year 5-9 is received at the beginning of each period. The cost of capital is 12%. Calculate the present value of the differential annuities using the two approaches. (15 mks)

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