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A novel process has been invented to make an established and soil conditioner blished and widely used type of (a) Using the Q1 DATA and

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A novel process has been invented to make an established and soil conditioner blished and widely used type of (a) Using the Q1 DATA and TABLE below, construct a cash assumptions. W, construct a cash flow table. State any (10 marks) at under the scenario Show that under the se () The target rate of return for this project is 15% presented, the project should not proceed. (7 marks) arve C) If the plant life were extended by three years, would the decision rate Q1 DATA Plant capacity Capital cost Variable costs Time for plant construction Plant life Scrap value Working capital 100,000 tonnes per year 153 million 100 per tonne 2 years 6 years 8% capital cost 15% capital cost 5,000 0 TABLE Q1 - Market and price forecasts Year Sales, tonnes per year Selling price, per tonne 0 1,000 4,000 4.000 3,000 16,000 2.000 40,000 1,300 60,000 1,000 100.000 800 150.000 600 200,000 500 230.000 450 250.000 450 MONO 230,000 10

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