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Mr. Kalalepo has an option of investing in either a piggery or a broiler enterprise. He has estimated the cash flows over the 7-year
Mr. Kalalepo has an option of investing in either a piggery or a broiler enterprise. He has estimated the cash flows over the 7-year life of the two projects. During the seventh year the piggery and broiler can be sold for N$20 500 and N$5 500, respectively. The cash flows can be summarised as follows: Initial investment Year 1 2 3. 4 5 6 7 Piggery 100 000 12,000 13,000 16,900 17,500 15,200 18,600 18,100 Broiler 35 000 3,500 4,500 6,700 7,800 7,900 8,500 8,900 Additional information: The cost of capital (discount rate) is estimated to be 12%. Determine: a. the Net Present Value of both investments (14) Mr. Kalalepo has an option of investing in either a piggery or a broiler enterprise. He has estimated the cash flows over the 7-year life of the two projects. During the seventh year the piggery and broiler can be sold for N$20 500 and N$5 500, respectively. The cash flows can be summarised as follows: Initial investment Year 1 2 3. 4 5 6 7 Piggery 100 000 12,000 13,000 16,900 17,500 15,200 18,600 18,100 Broiler 35 000 3,500 4,500 6,700 7,800 7,900 8,500 8,900 Additional information: The cost of capital (discount rate) is estimated to be 12%. Determine: a. the Net Present Value of both investments (14)
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