1.Determine Net Present value,whether investment should be favourably considered.
Lostus ltd plans investment in non current asset costng R300000.the non current assets will have 4 year life.year 1 R324000,year 2 R720000,year 3 R100000,year 4 R150000.
Financial for inventories and debtors amounting to R200000 will be required at start project.Trade credit provide R110000 of amount. All
workng capital will recovered at end of year 4.The expected scrap value of non current assets at end year 4 is R375000.The cost of capital is 12%