AdventureParks Ltd is evaluating the construction of a new theme park. The theme park would cost $$498$ million, but would operate for $20$ years. AdvertureParks

expects annual cash flows from operating the theme park to be $$71\mathrm{.}9$ million and its cost of capital is $12\mathrm{.}4\%.$

a$.$ Prepare an NPV profile of the purchase.

b$.$ Identify the IRR on the graph.

c$.$ Should AdventureParks go ahead with the purchase?

d$.$ How far off could AdventureParks' cost of capital estimate be before your purchase decision would change?