Ruth intends to buy a car worth R360 000 to use it as Uber and sell it in 10 years. The car isexpected to give her an average monthly profit of R40000, and this profit remains constantuntil the car is sold at a scrape value of R35 000 at the end of the tenth year.2. (a) Illustrate with the aid of a diagram the cash-flow diagram for this investment. (5)2. (b) Assess whether this proposal is worth going for using the present worth method if theMARR is 18%.

Part 2(a): Cash-Flow DiagramInitial Investment: R360,000 (outflow at time 0)Monthly Profit: R40,000…

Answered: Ruth intends to buy a car worth R360…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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