3.1 20 An initial investment of R8320 on a new Taxi is expected to generate net cash flows of R3411, R4070, R5324 and R2065 at the end of the first second third and four years respectively. Your Page friend required you to evaluate the investment to see if it is worth considering 2 What is the net present value of the investment if the discount rate is 18%? Explain the value to (6) your friend in basic terms. a) b) Assuming at the end of the fourth year, the Taxi would be sold for R900. What is the net present value of the investment if the discount rate is 18%? Explain the value to your friend in basic terms (7) 3.2 A young, Bloemfontein start-up firm is approached by the Premier of Southwest province with two new community development projects. The health project will cost R75000 to develop and is expected to generate R20000 in annual net cash flow. The entertainment project will cost R100000 to develop and is expected to generate R25000 in annual net cash flow. The firm is extremely concerned about its cash flow. Which project is better in terms of cash flow based on the payback period? Why? (5) 3.3 Using the following information, compute the direct cost of labour and total direct cost for a project team member: (4) Hourly rate. R80/hr Hours needed: 160 Overhead rate 40%