2. Star Products plc is considering whether or not to invest in a project which would cost 35,000 in the year ending 31st March 2019. The annual benefits to Star Products plc would commence on 1st April 2019 and for the year to 31st March 2020 would be a fixed income of 10,000 per year plus indirect labour cost savings of 500 per year. The annual fixed income would increase by 7% each year for the four following years due to Star Product's ability to improve its efficiency over time, but the labour cost savings will not change. The annual operating costs of the project will be 3,000 in the year to 31st March 2020 but would increase by 10% each year due to inflation. There will be no residual costs or benefits to the project at the end of its life, which will be 31st March 2024. Star Product's required rate of return (not adjusted for inflation) is 15%. REQUIRED: a) Should Star Products plc invest in this project? You should provide all calculations required to support your conclusion and state clearly whether or not you recommend that the company invest in the project. Your calculations should be rounded to the nearest whole . The discount factors for selected interest rates are given below; Interest rate Period 1 Period 2 Period 3 Period 4 Period 5 7% 0.935 0.873 0.816 0.763 0.713 10% 0.909 0.826 0.751 0.683 0.621 15% 0.870 0.756 0.658 0.572 0.497 (18 marks) b) What are the five stages of capital investment project management? You should explain what management's objectives are for each stage and identify one challenge that management will face in each of the five stages. (15 marks)