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Q1: Jhonson PLC to undertare a project with an initial investment of $16m. The cash flows before inflation expected from the project are as follows:
Q1: Jhonson PLC to undertare a project with an initial investment of $16m. The cash flows before inflation expected from the project are as follows: Years12345=4.2m4.9m5.5m5.8m6.1m Jhonson PLC uses a real discount rate of 6% and general inflation is expected to be 3\% per year for the duration of the project. The tax rate on profits is 30% payable the following year. 1. Calculate the NUP of the project using monetany cost of capital and real discount rate. 2. Disouss the use of monetany cost of capital and real discount rate to make decision for thonson PLC
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