(25 points) Inica Oil has been searching for ways to divenify in a more mastainable diroction. One of their chemical engineers has developed a new way to extract fertilizer direetly from sewage. Given that this is a line of basiness that will be important in tho coming clrcular coonomy, Inka Oil views this as a potentially promising investment, and has decided to pilot a plant (i.o, trial). They are now evaluating the coonomy of this pilot plant. The plant will taloc one ycar to build, with construction. costs of 40 million. The plant has a planned operating life of ton ycars, which implies a straightr-line depreciasion for the tife-time of the plant. Inks. Oil has an offer from the local utility to provide sewage at no cout. Annual custs of ruming the plant have been ealeulated at 5million/ycar. There is however a great deal of unecrtainty about the quantity and quality of the fertilizer produced using the new process. Their engineer has come up with three sccenarios for annual producticn: 25 tonnes/50 connes/100 tonnes. The first and second scenarios are equally likely and both scensarices together have 80 percent probability. If the fortilizer is of high quality, it can be sold to the country's hobby gardencrs at a price of 0.4million/ton. If the quality howcwer is low quality, the fertilizer will. be cxported at a price of 0.15 million/ / ton. The engincer views each quality scenario as equally liftely. 1. What are Inka's expected operating revenues for the next 10 yeurs. ( 5 points) 2. Camina.... 3. Inka Oil uses a cost of capital equal to 5 percent for this projoct. Would you rocommend Inks. to invest? Why? (10 points)