Answer to Question #249930 in Financial Math for 626

Question

 Mike wants to put R1, 000,000 investment/capital in the above project. He has analysed the estimated income and expenditure and found that the project will give incremental net cash flows or net operational cash flows of R360, 000 per year. The project has a lifespan of 5 years (salvage value is ignored). The expected average annual depreciation is R4000. Use the discount rate you calculated above to determine the Pay Back Period, Rate of Return, NPV and the IRR of the project and comment about your results