2) You are to start running your own business and you share your business idea with your best friend. The table below are the projected cash flows for your business. Additional information: a) The cost of capital 20%. b) The salvage value of equipment after year 6 is K15,000. Required: i. Your friend asks you whether you have prepared a business plan and you tell her, yes you have. Please advise her on the contents of your business plan. [2 marks] ii. From the data and information given above advise her on how viable the business is by calculating the net present value (NPV) and the internal rate of return (IRR). [6 marks] iii. If the rate of inflation is 10% per annum; what is the real cost of capital? [2 marks] iv. If the cost of capital if 30% would the project still be viable? Give reasons to support your answer. [3 marks] v. She says to you that she has heard people say that 'payback period method' can be used for project appraisal, but she does not know what that means. Required: a) Explain to her the payback period decision criteria in project appraisal. [2 marks] b) Calculate your project's payback period. [2 marks] c) What are the advantages and disadvantages of payback period as a method of investment appraisal? 3 marks