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You are considering investing in a project that is expected to have the following cash flows in years 1-6. Year Cash_Flow 1 2600 2 1300

You are considering investing in a project that is expected to have the following cash flows in years 1-6. Year Cash_Flow 1 2600 2 1300 3 4400 4 500 5 3000 6 38000 You have to make a decision of whether to invest in the project by the end of business today. Unfortunately, you have all of your money tied up in a property portfolio which has substantial transaction costs involved in selling quickly. The cost of the investment opportunity is R22523.19 and the expected return on the property portfolio is 16.7%. Assuming that the property portfolio and the project have identical risk, what is the maximum amount of transaction costs you would be willing to incur in selling part of your property portfolio to invest in this project? A) R129.74 B) R95.4 C) R152.64 D) R118.3 E) R127.2

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