An initial investment of R$1,200,000$ with a discount rate of $8\%$ over four years with a expected cash flow of R$250000$ would be

made immediately to establish the necessary manufacturing unit to take on the big supply contract. Most of this investment would

be funded through raising a long$-$term bank loan of R$1,000,000.$ The manufacturing plant was to be depreciated evenly over $4$ years

$($the duration of the contract$).$ A full year$$s depreciation was to be charged for $2014$ and added to the existing amount of R$225,000$

for the delivery vehicle fleet. The ongoing agency business sales were expected to drop to R$3,000,000$ for the year, and the

commission earned would remain at $20\%.$Assess the viability of the manufacturing project using the NPV and the interest rate of return. Based on your calculations, provide recommendations concerning this investment. Show calculation