Study the information given below and determine, based on its Net Present Value (NPV), whether the investment should be favourably considered for acceptance or not. INFORMATIONLotto Ltd plans an investment in non-current assets costing R3 000000 . The non-current assets are expected to have a four-year life, with the following net profits anticipated:[Year 1,R350 000],[Year 2,R750 000],[Year 3,R200 000],[Year 4,R170 000]] Working capital amounting to R200 000 will be required at the start of the project. All the working capital will be recovered at the end of year 4 . The expected scrap value of the non-current assets is R400 000. The cost of capital is 12%. Ignore taxes.

Principles of Accounting Volume 2
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Chapter11: Capital Budgeting Decisions
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Study the information given below and determine, based on its Net Present Value (NPV), whether the investment should be favourably considered for acceptance or not.


INFORMATION
Lotto Ltd plans an investment in non-current assets costing R3 000000 . The non-current assets are expected to have a four-year life, with the following net profits anticipated:
[Year 1,R350 000],[Year 2,R750 000],[Year 3,R200 000],[Year 4,R170 000]]

Working capital amounting to R200 000 will be required at the start of the project. All the working capital will be recovered at the end of year 4 . The expected scrap value of the non-current assets is R400 000. The cost of capital is 12%. Ignore taxes.

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