Calculate the net present value $($NPV$)$ of the project assuming it is funded by debt and suggest whether the CEO should proceed with the project based strictly on the NPV$.$Financing the Project

The total cost of the project is $R20$ million. The financial manager is

contemplating funding this project with debt at a projected interest rate of

$9\%.$ The projected cashflow from this expansion is shown in the table on

the left. The company beta is $1\mathrm{.}8,$ the $5-$year SA government bond yield

$($risk$-$free rate$)$ is $6\mathrm{.}5\%,$ the expected market return is $12\%,$ and the current

company tax rate is $27\%.$