II. The owner of Ingram Estates is evaluating a new property. Allan Smith, the company's market research analyst, has just finished his analysis of the property area. He has estimated that the property would be great opportunity for the company to invest in. The owner asked you to perform an analysis of the new property and present recommendation on whether the company should acquire the new property. You have used the estimates provided by owner to determine the revenues that could be expected from the property. You have also projected the expense of investing the property and the annual operating expenses. If the company invests in the property, it will cost OMR 1.75 million today. The expected cash flows each year from the property are shown in the table. Ingram Estates has a 9 percent required return on all its property. However, the owner has made some adjustment to expected cashflow. The cashflows will be increased in year 12 and year 14 by 5%. A) You are required to calculate Net Present Value of the project. (13=3Marks) B) Based on your analysis should the owner undertake the project. (12=2Marks) Solution