I. Uncertain annual cash ow Sepchek Oil Field Services is considering the installation of a new electronic surveillance system for its warehouse. The system has an initial cost of P160,000 and an expected life of ve years. For its life, the system will save the company labor costs for security guards. Required 1. If the company's cost of capital is 10%, how much annual increase in cash ows is necessary to minimallyjustify the investment? 2. Based on your answer to (1), what would be the payback period for this investment? ll. Uncertain cost of capital Brenda's Bees is considering the purchase of new honey processing equipment. The equipment would cost P100,000, have an expected life of seven years, and save P28,000 annually in maintenance, operating, and cleanup costs. The rm's cost of capital is estimated to be 10%. Required 1. Calculate the NPV ofthe proposed project. 2. Because the company is fairly small, the CEO is uncertain about the rm's cost of capital. To the nearest whole percent, what is the maximum the rm's cost of capital could be for this project to be acceptable? Ill. Uncertain useful life King Corporation is considering an investment that will require an initial cash outlay of P200,000 to purchase non- depreciable assets. The project promises to return P60,000 per year (after-tax) for eight years with no salvage value. The company's cost of capital is 11%. The company is uncertain about its estimate of the life expectancy of the project. Required How many years must the project generate the P60,000 per year return for the company to at least be indifferent about its acceptance? (Do not consider the possibility of partial year returns.)