1. Consider a process for the production of a specialty chemical. The land is purchased for $40 MM. The FCI is spent evenly over the next two years for a total of $660 MM. The WCI ($ 70 MM) is spent towards the end of the second year. Operation starts at the beginning of the third year. Table 1 shows the estimated annual production, selling price of the product, and annual operating cost (which accounts for raw materials, utilities, labor, maintenance, etc.). The project has an anticipated useful life period of 10 years from the start of operation. A linear depreciation over 10 years is used. At the end of the project, the WCI and salvage value are estimated to $70 MM and $60 MM, respectively. A tax rate of 35% is applied. The company uses a discount rate of 15%. Calculate the NPV, DCF ROI, and discounted PBP for the project. (Hint: you need to add rows for year 0, 1 and 2 in the Table to consider expenses related to land, FCI and WCI.) Table 1. Data for Problem 1. End of Year Estimated Annual Estimated Selling Estimated Annual Price of Product Production Operating Cost ($/tonne) (MM tonne/yr) (S MM/yr) 3 1.5 400 230 4 2.5 410 380 5 2.5 410 380 6 2.5 410 380 7 2.5 440 390 8 2.5 440 390 9 2.0 460 390 10 2.0 470 390 11 2.0 480 390 12 1.5 500 400