Investment Option "South"

This potential investment is less risky and shorter term, so it has a minimum rate of return of

$6\mathrm{.}40\%.$ This investment would require an initial outlay of cash of $$136,500,$ and at the end of

the $4-$year life of this investment BIP Corporation is expected to have to pay a wind$-$down

cost of $$13,650.$ For the first $3$ years of this investment, net annual cash inflows are expected

to be $$33,250$ and for the last year of the investment, the net annual cash inflow is expected

to be $$83,125.$