A French renewable energy company is considering opening a plant in Derby in the UK to take advantage of the engineering expertise in that area as well as the UK business environment, which has fewer restrictions. They feel that the UK manufacturing presence will help them sell into the UK renewable energy market. They see this as a 6 year project and the residual value is a best estimate of the value of the business at the end of the 6 years. Their Paris team have prepared an estimate of the costs and benefits of the new operation. The estimates of costs and revenues are as follows and are all in euros: Initial Investment Revenues from new business Operating costs Residual Value Discount rate 25,000,000 5 in year one rising by 3m each year 50% of sales 15m 12% Year 1 2 3 4 5 6 12% Discount 0.893 0.797 0.712 0.636 0.567 0.507 Required: a) Calculate Payback for this project. Show all your calculations. (4 marks) b) Calculate NPV for this project. Show all your calculations. (6 marks) c) Using your answers to A and B above advise the board of the company if it should go ahead with this investment. You are advised to consider both the quantitative and qualitative elements of the project. (12 marks) 8/8 103% What further information would you like to enable you to make this decision? d)