The Scenario
A printing company is considering buying a new digital press for R850,000. It will generate additional net cash flows of R220,000 per year for 5 years. The company's cost of capital is 12%. Should they buy it?
The Brief
Calculate the NPV and IRR. Show your working step by step. Make a clear recommendation based on the results.
Deliverables
- The NPV calculation with each year's discounted cash flow shown
- The IRR (you can estimate using interpolation or trial and error — show the method)
- The payback period (simple, not discounted)
- A one-paragraph recommendation: buy or not, and why
Submission Guidance
NPV > 0 means the project creates value. IRR > cost of capital means the same thing. They should agree. If they do not in your calculation, you have made an error.
Submit Your Work
Your submission is graded against the rubric on the right. If you pass, you get a public Badge URL you can share on LinkedIn. There is no draft save, so work offline first and paste your finished response here.