Quarterly Charges Standing charge per quarter R15 Gas consumption charge R500/1000 metered units Average domestic monthly gas consumption 120 metered units/month A survey was conducted recently in the new residential area. There was a 50% response rate. 90% of the respondents indicated their desire to be connected to the gas supply.
Required:
Determine the maximum capital project cost that the company should be willing to spend to provide gas to the residents of the new settlement. [15 marks] Hint: calculate the net income per customer and the NPV per customer first, then determine the number of customers. Use these figures to calculate the maximum capital project cost.