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Please assist me with the question below Question 5 Investors want to sink a mine shaft and build surface workshops and offices at a new
Please assist me with the question below
Question 5 Investors want to sink a mine shaft and build surface workshops and offices at a new mine over a period of five years. It is estimated that an amount of R900 million will have to be spent on the project every year for the first five years. It is foreseen that from year six the mine will start with production and generate positive cash flows of R320 million per year for 20 years until it reaches the end of its life. a) Draw a cash flow diagram for the project and state any assumptions that you may make. {3} b) Calculate the net present value of the project. Use a discount rate of 12%. You must do this by using at least two methods, e.g. calculator and spreadsheet. {10} Advise the investors on whether they should invest in this project or not. {1} (14) Activate WindowsStep by Step Solution
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