(a) 4000 TEU containership that has an initial cost of 45 million, annual operating costs of 1.85 million. This ship is operating between Newcastle - Quindao ports which are 4800 nautical miles apart. The average speed underway is 20 knots, the ship is at sea for 10 months per annum. From Newcastle to Quindao, ship travels with 100% load and from Quindao to Newcastle, the ship travels with 50% ballasted condition. i) Find the RFR to meet the owner's target rate of return is 10% after tax. The tax rate is 25%, the ship's economic life is 20 years, and the terminal value is 5 million. Assume that depreciation is the only tax-exempt item. (6 MARKS) ii) If the freight rate is 140 per TEU assess whether the investment is viable or not. What can the shipowner do to improve the situation? (2 MARKS) (b) A proposed warship has these projected figures: Initial cost 250m Annual costs of operation for the first 10 years 10m Annual costs of operation for the second 10 years 10m The resale price after 20 years is 50m Target interest rate is 8% Calculate the life cycle cost (LCC) and the average annual cost (AAC). [2 MARKS]