Present value of R1 Question 2 2 [15 marks) James Brown is considering investing R12,000 in a project with the following cash revenues and expenses: Periods 96 69 996 1096 1294 19 1 0.962 D.943 0.926 p.909 0.893 1.877 2 0.925 2.890 0.857 1.826 0.769 9.797 0.712 3 0.889 0.840 1.794 p.751 1.675 Year 1 4 0.85 Revenues R20.000 R22.000 0.792 p.735 0.683 2.636 .592 5 0.822 D.747 1.681 2.621 0.567 p.519 Year 2 Year 3 Expenses R18,000 R19,000 R20,000 R17.000 R17.000 6 2.790 0.705 p.630 564 1.507 0.456 7 0.760 0.665 D.583 0.513 2.452 2.400 Year 4 R22.000 R22.000 R25.000 8 2.731 D.627 D.540 2.467 2.404 . 351 Near 5 9 9.703 D.500 0.424 0.361 D.308 p.592 D.558 10 0.676 p.463 0.386 0.322 2.270 James Brown requires a minimum rate of return of 8%. Present value of an Annuity of R1 Periods 14% % 996 1 9.962 0.943 D.926 106 19 D.909 0.893 p.877 2 1.886 1.833 1.783 1.736 1.690 1.647 Required: 1. Calculate the net cash inflows in each of the 5 years. 2. What is the payback period? 3. What is the net present value of the investment? 3 2.775 1673 577 2.487 2.402 2.322 (5 marks) (5 marks) (5 marks) 4 3.630 B.465 1.312 B.170 B.037 1914 5 14.452 4.212 5.993 5.791 5.605 5.433 6 5.242 4.917 14.623 4.355 14.111 3.889 7 1.002 $_382 5.206 44.868 14.564 #.288 8 1.733 $ 210 $.747 1.335 14.968 9 1.435 6.802 5.247 5.759 5.328 4.639 11.946 5.216 10 8.III 1.360 1.710 6.145 5.650