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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 life

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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 life of the two projects. During the seventh year the piggery and broiler can be sold for N$20500 and N$5500, respectively. The cash flows can be summarised as follows: Additional information: The cost of capital (discount rate) is estimated to be 12%. Determine: a. the Net Present Value of both investments (14) b. the payback period of both investments (4) c. In which enterprise should Mr. Kalalepo invest? Motivate your answer. (2)

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