5. A golf developer wishes to build a new golf course. It will cost $2 million now (time 0) for buying the land and the initial design and development. An additional $800,000 will be spent at the end of the 1st year for more course development work. The course will open halfway through year 2 and is expected to generate $300,000 in revenues (cash inflows will $300,000 at time 2). During this year, $600,000 will be spent on a new clubhouse (cash outflow of $300,000 at time 2). Net revenues are projected to be $400,000 for year 3, $500,000 for year 4, $600,000 for year 5 and $700,000 for years 6 to 15 (assume all values are at the end of the year). The developer will then sell the course at the end of the 15th year $3.5 million (time 15). (a) Calculate the net present value of this investment at the following cost of capital rates: 0%, 2%, 4%, ..., 28%, 30%. Then graph your results. (Hint: try using the NPV function in Excel) (2 + 2 = 4 marks) (b) Calculate the internal rate of return (IRR) for this investment to 2 decimal points. (Hint: try using IRR function in Excel) (2 marks)