Assume an interest rate of 4% c.q for the NPV calculation

Outgoing funds: (Expenses)

1) Re-Paying back the face value of a $2,000,000 bond 2 years from the start of the project

2) Paying interest coupons quarterly at 3% c.q

3) Salaries of staff of $30,000 payable each month

4) Office expenses of $20,000 payable each month

5) Loan payments on a loan of $800,000 at 2% c.q. paid quarterly to be repaid in full in 2 years

6) Initial start up expenses for building and equipment of $500,000

Incoming Funds (Revenues)

1) $2,000,000 bond from investors (referred to it 1) above)

2) $800,000 loan from bank (referred to in 5) above)

3) Revenue from product at $200,000 each quarter

Make sure to have all documents in PDF format

a) A detailed time line of all of the Outgoing funds and Incoming Funds. Use different Colors or styles to distinguish them (Or use outgoing above the line and Incoming below the line). Make Time line readable . Show every month and quarter and yearly values clearly. Use landscape orientation to allow for more room. You make use ... notation where repetitions occur

There are 9 Funds in all (6 outgoing 3 incoming). Each properly labelled Fund on time Line counts for 4 marks. There is an additional 4 marks for overall Format as demonstrated in the Course. Funds must be clearly labelled showing all relevant Dates. Annuities must be clearly labelled and show individual payments. Use arrows to indicate where funds are being valued.

b) Determine the Net Present Value of the Project at time 0. Use 4% c.q for this valuation. Show details of the fund. Show the value as Incoming funds minus the outgoing funds using present values of all. Show complete details of all calculations. On a separate page from the detailed timeline, clearly Show the value of EACH fund and the corresponding Equation detailing than the value of the fund is determined. Each Fund value and Equation counts for a total of 4 marks . There is an additional 4 marks given for computing the overall value of the incoming and outgoing funds. Also Show equations relating to these totals.

c) COMMENT on the value of the project from a financial point of view in a One Page typed executive report. Add suggestions as to how the financial aspect of the project could be improved. Support your comments Based on Your findings from parts a) and b).