TABLE 1 Present value of R1 Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943 0.926 0.909 0.893 0.877 2 0.925 0.890 0.857 0.826 0.797 0.769 3 0.889 0.840 0.794 0.751 0.712 0.675 4 0.855 0.792 0.735 0.683 0.636 0.592 5 0.822 0.747 0.681 0.621 0.567 0.519 6 0.790 0.705 0.630 0.564 0.507 0.456 7 0.760 0.665 0.583 0.513 0.452 0.400 8 0.731 0.627 0.540 0.467 0.404 0.351 9 0.703 0.592 0.500 0.424 0.361 0.308 10 0.676 0.558 0.463 0.386 0.322 0.270 TABLE 2 Present value of an Annuity of R1 Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943 0.926 0.909 0.893 0.877 2 1.886 1.833 1.783 1.736 1.690 1.647 3 2.775 2.673 2.577 2.487 2.402 2.322 4 3.630 3.465 3.312 3.170 3.037 2.914 5 4.452 4.212 3.993 3.791 3.605 3.433 6 5.242 4.917 4.623 4.355 4.111 3.889 7 6.002 5.582 5.206 4.868 4.564 4.288 8 6.733 6.210 5.747 5.335 4.968 4.639 9 7.435 6.802 6.247 5.759 5.328 4.946 10 8.111 7.360 6.710 6.145 5.650 5.21 Required: Refer to the above Tables. Tyler Perry a Movie Producer and Director at Lionsgate Studios is considering investing R12,000 in a project with the following cash revenues and expenses: Revenues Expenses Year 1 R20,000 R18,000 Year 2 R22,000 R19,000 Year 3 R22,000 R20,000 Year 4 R22,000 R17,000 Year 5 R25,000 R17,000 Tyler Perry requires a minimum rate of return of 8%. 1. Calculate the net cash inflows in each of the 5 years. 2. What is the payback period? 3. What is the net present value of the investment
TABLE 1
Present value of R1
Periods 4% 6% 8% 10% 12% 14%
1 0.962 0.943 0.926 0.909 0.893 0.877
2 0.925 0.890 0.857 0.826 0.797 0.769
3 0.889 0.840 0.794 0.751 0.712 0.675
4 0.855 0.792 0.735 0.683 0.636 0.592
5 0.822 0.747 0.681 0.621 0.567 0.519
6 0.790 0.705 0.630 0.564 0.507 0.456
7 0.760 0.665 0.583 0.513 0.452 0.400
8 0.731 0.627 0.540 0.467 0.404 0.351
9 0.703 0.592 0.500 0.424 0.361 0.308
10 0.676 0.558 0.463 0.386 0.322 0.270
TABLE 2
Present value of an
Periods 4% 6% 8% 10% 12% 14%
1 0.962 0.943 0.926 0.909 0.893 0.877
2 1.886 1.833 1.783 1.736 1.690 1.647
3 2.775 2.673 2.577 2.487 2.402 2.322
4 3.630 3.465 3.312 3.170 3.037 2.914
5 4.452 4.212 3.993 3.791 3.605 3.433
6 5.242 4.917 4.623 4.355 4.111 3.889
7 6.002 5.582 5.206 4.868 4.564 4.288
8 6.733 6.210 5.747 5.335 4.968 4.639
9 7.435 6.802 6.247 5.759 5.328 4.946
10 8.111 7.360 6.710 6.145 5.650 5.21
Required:
Refer to the above Tables. Tyler Perry a Movie Producer and Director at Lionsgate Studios is
considering investing R12,000 in a project with the following cash revenues and expenses:
Revenues Expenses
Year 1 R20,000 R18,000
Year 2 R22,000 R19,000
Year 3 R22,000 R20,000
Year 4 R22,000 R17,000
Year 5 R25,000 R17,000
Tyler Perry requires a minimum
1. Calculate the net
2. What is the payback period?
3. What is the
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