A Russian businessman offers a major Japanese car manufacturer an eight-year lease on a disused tank factory in Southern Russia. The company could refit the factory and use it to manufacture low cost recreational off road vehicles for the holiday car-hire market in Southern Europe. The total cost of the investment , including the lease and the installation of the equipment is $ 55 million. Once the plant is operational, the following cash flows are expected:

End of year Net cash flow ($millions)

1 8

2 12

3 15

4 20

5 20

6 10

7 10

8 5

At the end of the eighth year the lease would expire. The disposal value of the equipment is likely to be $5 m.

(a) Determine the net present value for this project based on a discount rate of 20%.

(b) Determine the internal rate of return for the project.

PLEASE PROVIDE ANSWER IN NORMAL FORMAT, NOT IN PICTURE FORMAT.