A project has the following expected net cash flows associated with it: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 -R 800 000 R150 000 R200 000 R400 000 R100 000 R100 000 The cash flows are expressed in real terms. Adjust the cash flows to nominal terms assuming constant inflation of 5% and calculate the NPV of the project. The company in question has a WACC of 10%.

A project has the following expected net cash flows associated with it: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 -R 800 000 R150 000 R200 000 R400 000 R100 000 R100 000 The cash flows are expressed in real terms. Adjust the cash flows to nominal terms assuming constant inflation of 5% and calculate the NPV of the project. The company in question has a WACC of 10%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 2P

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