1.A proposed chemical plant will require a fixed capital investment of $10M . It is estimated that the working capital will be 25%% of the total Investmentannual depn costs are estimated to be 10% of the fixed capital Investment.If the annual profit will be $3M, determine the percent return on the total investment and the payout period. 2. An Investigation of a proposed investvestment has been made The following result has been presented to the mgt.The pay back period is 5 years. Annual depn is 10% per year of the fixed capital Investment and fixed capital investment is 85% of total capital investment. Using this Information, determine the rate of return on the investment. 3. A process with a depreciable capital investment of $100M is to be constructed over a 3 year period. At start up,$ 20M of working capital is required. The plant is expected to operate for 10 years. At full capacity expected for the third and subsequent years of operation , the sales revenues are projected to be $150M per year and the total operating expenses excluding depn , are projected to be $100 M per year. During the first and second years of operation, the sales revenues are anticipated to be 50 and 75 % the sales revenues projected in the third and subsequent years, respectively. The operating expenses during the first and second years will be the same as in the third and subsequent years. Assume that the Income tax rate is 35% . Using the third year as a basis, determine a) return on the investment after taxes b) payback period. 4 An oil company is being offered a special conting for a gasoline underground tank installation in its service stations which will increase the life of the tank from the usual 10 to 15 years.The cost of the special coating will Increase the cost of the 400K tank to 580K cost of installation for olther for the tanks is 240K. If salvage values for both is zero and I=20%%, would you recommend the special coating?Use AC method 5. A firm is considering replacing a machine that has been used for making a certain kind of packaging material. The new improved machine will cost $31,000 installed and will have an estimated economic life of 10 years with a salvage value of $2,000. Operational costs are expected to be $1000 per year throughout itsservice life. The old machine in use had an original cost of $25,000 four years ago and at the time it was purchased, its service life was estimated to be 7 years of a salavage value of $5,000. The old machine has a current market value of $7,700. If the firm retains this old machine further, Its updated market values and operational costs for the next 4 years will be as follows: Year end Market value Book value Op. cost 0 7700 7889 4300 5578 3200 3300 3347 3700 w 1100 1116 4800 0 5850 The firm's min. attractive rate of return is 12% a)Determine whether it is economical to make the replacement now. Why or why not