(a) Modified internal rate of return (MIRR) (12 MARKS)

(B) Accounting rate of return (8 marks)

SHOW ALL WORKINGS CLEARLY

Question 4 ( 50 marks) MTC Namibia Ltd has the opportunity to invest in Towers, a project which is supported by the government to extent mobile and internet network coverage to rural areas. The project has the following estimated future cash flows: Year 1 2 3 4 5 Cash flows 2 600 000 4 500 000 5 500 000 3 400 000 2 000 000 (NS) The cost of the project is N$ 10 million. The company cost of capital is 12%. The project has a zero residual value. Ignore taxation. Required: Determine the following for the project and advice management whether the project can be accepted if the company requires to recover its investment within three years