questipn 4 :

A project requires an investment of 380k at the start of the first year. Income from the project will begin at the start of second year. Income will be received annually in advance. The first income payment will be 20k and subsequent income payments will increase by 10k until they reach 80k. Subsequent income payments will remain at 80k. The project will cease after 10 years (immediately before the income payment then due) and produce a maturity payment of 250k. a) Find the Net Present Value of the project at a risk discount rate of 5% p.a. effective. [4] b) Find the Discounted Payback Period of the project at interest rate of 5% p.a. effective. [4]