In my role as a development finance analyst, it is imperative to thoroughly evaluate the financial

feasibility and prospective ramifications of three distinct projects initiated by Godezhy PVT LTD$,$

a furniture enterprise. Project A centers on the production of beds for NETCARE hospital, while

Project B focuses on manufacturing chairs for a church located in Mpumalanga. Additionally,

Project C entails the sale of tables to LETS Institute. Detailed cash flow projections for these

projects are provided in the table below:

Year Cashflows Project A Cashflows Project B Cashflows Project C

$1$ R$45,000,000$ R$75,000,000$

$2$ R$45,000,000$ R$60,000,000$

$3$ R$45,000,000$ R$30,000,000$ R$50,000,000$

$4$ R$45,000,000$ R$30,000,000$ R$50,000,000$

$5$ R$45,000,000$ R$30,000,000$ R$50,000,000$

$6$ R$45,000,000$ R$30,000,000$ R$30,000,000$

You are required to:

a$)$ Calculate the payback period for each project. $(6)$

b$)$ Calculate the NPV for each project at $10\%.(6)$

c$)$ Derive the IRR of each project. $(8)$

d$)$ Rank the projects by each of the techniques used. Which of the three projects should be

pursued? Justify your recommendation. $(6)$

e$)$ Suppose the cost of capital rises to $15\%,$ calculate the new NPV and make a

recommendation as to which project should be considered. $(9)$