Investment appraisals

$[20]$

a$)$ The Lahore Amusement Park $($LAP$)$ is considering investing in a new water slide, which will be the highest water slide in the country and expected to pull a large crowd and boost sales. The slide costs Rs$.2,100,000$ and will last for $10$ years and can be sold for Rs$.300,000$ salvage value at the end of $10$ years. LAP estimates that the new slide will bring incremental pre$-$tax revenue of Rs$.620,000$ per year. In addition, there is a fixed cost of Rs$.100,000$ per year and variable cost of $2\%$ of pre$-$tax revenue. The discount rate for this project is $8\%$ and the tax rate is $20\%.$

i$)$ Find the NPV of the project and state whether LAP should install this new slide.

$10$