QUESTION 3 (10 MARKS)

Project Aso fiafia (Happy days!) with an initial investment value of R5 668 477 on new warehousing infrastructure for the online logistics distribution facility, is expected to generate cash inflows of R3 500 000; R2 400 000; R2 900 000 and R4 400 000 at the end of the first, second, third and fourth Page 26 of 27 LPMLMY3 years respectively. At the end of the fourth year, the technology will have a salvage value and will be sold for R1 200 000. The investment has a discount rate of 10% per annum.