An oil company is considering the development of one of its marginal assets in the North Sea. The opportunity rate of return is 13%. Incremental cost and income implications for one of the development scenarios are as follows:

Initial develop costs year 1	(16 m)
Initial develop costs year 2	(7 m)
Annual operating and maintenance costs starting from year 2	(3 m)
Annual income after first oil in year 3	12 m
Additional non-annual repair costs every 3 years	(4 m)
Expected total asset life	13 years
Decommissioning cost	(9 m)

a) Calculate the following: maximum exposure net present value profitability index undiscounted payback period discounted payback period internal rate of return

b) Providing justifications for your answer, would you recommend the development scenario?