Required:

1. You are required to calculate the net present value of the project and, based on the interpretation, advise management on an appropriate decision. (17 marks)

Note: Present value of ZAR 1 at different rates of interest are as follows:

Year	10%	12%	14%	16%
1	0.9091	0.8929	0.8772	0.8621
2	0.8264	0.7972	0.7695	0.7432
3	0.7513	0.7118	0.6750	0.6407
4	0.6830	0.6355	0.5921	0.5523
5	0.6209	0.5674	0.5194	0.4761