eNIS 1610 A distribution power quality investigation was conducted at a mine. The Power Quality which was produced thereafter recommended the installation of harmonic filters and power factor improve equipment as two major interventions which are required at the mine. The initial investment capital for installation of the harmonic filiters and power factor improvement equipment was determined as u (PQ) investigation report the mine management approac hed two investments banks, Bank A and Bank B, for bridging finance so as to source the capital required for the retrofit project and power factor correction. The respective banks have offered the mine the following rates as the cost of capital Bank A: 12% per annum Bank B: 20% per annum The projected cash flows for the project are listed, for the 5-year project duration as follows: 2 4 YEAR CASH FLOW -25,000.00 12,000.00 10,000.00 8,000.00 6,000.00 (US$) OUT The discount rate (marginal cost of capital) used by the mine is at par with the cost of capital (i) Determine the Net Present Value (NPV) of the installation of harmonic filters and power factor improvement equipment when the mine accepts the funding from Bank A. a) [ 3 Marks] li) State, with reasons, whether accepting bridging finance from this bank at the given cost of capital is a [ 3 Marks] good and sound decision (i) Determine the Net Present Value (NPV) of the installation of harmonic filters and power factor improvement equipment when the mine accepts the funding from Bank B (ii) State, with reasons, whether accepting bridging finance from this bank at the given cost of capital is a good and sound decision. By using a linear approximation technique or deploying a graphical technique, determine the Internal Rate of Return (IRR) for the retrofit project. b) [3 Marks] [ 3 Marks] c) 6 Marks]