16.ali zaman is the financial manager of the dmg corporation. he wants to make some long term investments . he is considering constructing a hostel building right opposite his university campus. he calls this project a. the building will take two years to construct and will require total initial investment of 10 million equally divided between the two initial construction years. the building will have a 10 year life. ali zaman thinks that in the first year of operation, it will have cash flows of 5 million which will grow at a rate of 10 percent per year for the next 5 years and then the growth rate will fall to 5 percent. after 10 years of use the building will be obsolete and will require a lot of expenditure on uplift and repair and ali zaman thinks that if its sold in the terminal year the value will be 40 million. ali zaman owns the land that he bought for 25 million 5 years ago but the current value is estimated to be 35 million. he needs to spend another 2 million to clear up the land and level it before starting construction. the required rate of return is 10 percent on projects with such risk. for project b he is considering building a parking lot on the same land. the parking lot will bring will not bring a lot of cash flows so he is thinking of building two smalls shops that sell food items and essential stationary. the total construction cost will be 8 million in year 0. but the cash inflows are expected to be 1 million in the first year and its expected to grow at 6 percent forever. the required rate of return for this project is 8 percent. for project c he is considering building a roof top restaurant on the roof top of the hostel building or the roof top of the parking lot. project b and c are: