Blue Sky co. (family company) is considering the purchase of a new plant to produce a new product code-named X9. The plant is readily available and can be operate immediately at a cost of 160,000. The company has already spent 40,000 on researching and developing the new product. The best estimate of revenues and costs arising from the operation of the new plant are as follows:

Years
	1	2	3	4	5
Selling price ( per unit)	100	120	120	100	94
Variable cost ( per unit)	50	50	40	30	40
Annual fixed costs (000)	23	23	23	23	23
Sales volume (units)	800	1,000	1,200	1,000	1,000

Depreciation is based on straight-line method and not included in annual fixed cost.

Required: a) Produce the annual net cash flows associated with the new product and calculate the net present value. The companys cost of capital is 8%. (22 marks)

b) What would your view of the advisability of purchasing the plant if the companys cost of capital rose to 12%? (8 marks)

c) Calculate the internal rate of return of the project and explain what it means. Please support your discussion with academic references. (10 marks)

d) Discuss the possible ways to finance buying the new machine. Please highlight advantages and disadvantages of these potential methods and which one you think is more relevant to Blue Sky Co, as a family firm. Please support your discussion with academic references (35 marks).

e) Discuss other potential factors (non-financial factors) that Blue Sky co. should take into consideration when taking this investment decision (15 marks).

f) Presentation and reference -please follow APA referencing style (10 marks).

Answer was already published in Chegg. But I believe it is not the right answer. Kindly help me out with this answer. Step by step detailed calculations.