A foreign project has an initial investment of $1,400. Its net cash flows are expected to be $900, $1,000, and $1,400 for each of the next three years. The certainty equivalent coefficients of the project are 0.75, 0.55, and 0.35 for each of the next three years. With a 6-percent riskless rate of return, solve the certain net present value of the project? 3. A foreign investment project with an initial cost of $15,000 is expected to produce net cash flows of $8,000, $9,000, $10,000, and $11,000 for each of the next four years. The firm's cost of capital is 12 percent, but the international financial manager perceives the risk of this particular project is much higher than 12 percent. The international financial manager feels that a 20 percent discount rate would be appropriate for the project. a. Work independently to solve the payback period of the project? (5 marks) b. Apply the correct method to solve the net present value of the project at the firm's cost of capital? (5 marks) c. Use the right technique to solve the risk-adjusted net present value of the project? (5 marks) 4. Max Factor company is considering to introduce a new cream. The manufacturing equipment will cost Rs. 5,60,000. The expected life of the equipment is 8 years. The company is thinking of selling the cream in a single standard pack of 50 grams at Rs. 12 each pack. It is estimated that variable cost per pack would be Rs. 6 and annual fixed cost Rs. 4,50,000. Fixed cost includes (straight line) depreciation of Rs. 70,000 and allocated overheads of Rs. 30,000. The company expects to sell 1,00,000 packs of the cream each year. Assume that tax is 45% and straight line depreciation is allowed for tax purpose. Evaluate the project of Max Factor and help them in applying the proper technique to calculate the cash flows. (5 marks) 5.Maxwell company is relegated to a venture ahead of schedule in the venture lifecycle. Something that must be done is to do a justification for the project. Since very little information is known about the project, the estimates are considered to be rough estimates. The accompanying table is the project managers gauge of the income that will occur throughout the following five years: End of Year Cash Flow In Cash Flow out 1 0 500,000 2 300,000 90,000 3 400,000 100,000 4 100,000 175,000 5 50,000 35,000 a. Apply the formula to calculate the payback period for this project? (5 marks) b. Construct the net cash flow at the end of five years? (5 marks) 6. Maryam has been hired as an intern at Samry, a small custom embroidery and design business. She is amazed at the many uses her manager has found for technology. She is able to draft customer designs using software, and her manager has even told her about machines that can move and see like human beings. The embroidery machines are so sophisticated that in order to change from one product to another, Maryam only has to change the computer program. Samry sells many of its products over the Internet, so there is no intermediary.(3*5marks each=15 marks) a. Show how Samry can transforms its embroidery inputs into outputs? c. What approach will Samry use so that the machines that can move and see like human beings and are able to perform complex operations.? d. How can you tell what she is concerned about ?