Arnold Ltd is considering whether to increase its borrowing and invest in expansion into the new market of Electric cars to increase returns to the business. There is already a Project Team in place, which has begun assessing the opportunity and would deliver the development it it receives board approval. Costs of the team to date are 5300.000. Capital planning has already priced up the new the machinery and the Product Development team have given an estimate of the costs of bringing products to market. The Sales manager has given a forecast of potential sales and a member of the management accounts team has provided costings. Production line machines have a 6-year lifespan. Details are as follows; 0005 Capital Investment In machinery 10'000 Additional Product Development expense 3,200 Estimated Sales Estimated Cost Estimated Revenue Marketing 0005 Year 1 30.000 Year 2 32.000 15,000 11.000 Year 3 39.000 19,500 9,000 Year 4 4,000 Year 5 18.000 Year 6 4,000 Investments would be made in 2021 with sales commencing in 2022 (year 1). Estimated of sales. revenues and costs have been based on current government subsidies and incentives in place at the time of the report. There is no current indication whether these will improve or worsen over time. Investments would be made in 2021 with sales commencing in 2022 (year 1). Estimated of sales, revenues and costs have been based on current government subsidies and incentives in place at the time of the report. There is no current indication whether these will improve or worsen over time. Arnold Ltd's Average Cost of Capital is 12% Discount table at 12% Discount Year Factors 0.893 2 0.797 3 0.712 4 0.636 5 0.567 0.507 0.452 4 8 0.404 Continued.. C.1) Critique different available approaches to capital investment appraisal. C.2) Analyse the proposed electric cars development, calculating the payback period as accurately as possible and the Net Present Value, making a recommendation whether or not to proceed with the investment considering risks and financial and non-financial factors