Question 17 Company A is a hospitality company, that has made a loss during the year due to a global pandemic. Explain how it could arise that despite having a loss-making year, Company As cash flow statement has showed that it has had a sizeable inflow of cash during the year. [5]

Question 18 A financial services company is considering investing in a new project (ending after 5 years) that has a $300m cash outlay in the first year followed by cash inflows. The cash flows expected to be generated by this project are:

Years 0 1 2 3 4 5

Cashflows ($m) -300 10 40 80 200 250

Calculate the Payback Period of the project and the Net Present Value, using a discount rate of 6%. Comment on the results. [5]