FPS would provide only marketing, sales, and distribution for natural gas pipeline valves.
Piscataway would have to invest in faciliites to manufacture the valves, spending	$7,465	in Year 0
Piscataway would have to invest in faciliites to manufacture the valves, manufacture the valves themselves, and incur administrative expenses.
Total cash-out fllow for these are as shown below.
($s in 000s)
Year	1	2	3	4	5	6	7	8	9	10
Cash-In Flow (Payments from Customers)	$3,700	$7,515	$12,515	$18,375	$23,810	$25,305	$27,175	$36,875	$37,825	$37,900
Total Cash Outflow	$2,750	$5,045	$8,135	$11,025	$14,285	$14,920	$14,945	$20,280	$20,800	$20,815
In addition, FPS would receive an annual fee of	12%	of payments to customers to compensate them for marketing.
These payments are not included in the Total Cash Flow above.
Piscataway's CFO has decided to use a required rate of return of	20%	to evalaute the FPS proposal.
(i) What would be Piscataway's net operating cash flow if they choose FPS?
(ii) What major risk factors might have gone into the CFO's choice of the above required rate of return?
(ii) What is the net present value of the FPS proposal?