James was recently recruited as the Financial Manager in Hillwood Golf Club. He initially worked as a junior executive in a for-profit organization for a period of 5 years before being employed at Hillwood Golf Club. James has had no prior experience dealing with financial matters and doesn't want to make any mistakes. Therefore, James requires a detailed report from you, a talented group of MBA students, before finalizing any significant decisions. Hillwood Golf Club was founded in 1945, serving golfers of all ages for the past 76 years. It once used to be the go-to place for the best recreational experience in Toronto in the past few decades. However, it has seen its membership decrease to other clubs and recreation providers over the past few years. In an attempt to attract new members and retain existing members, the founders of the golf club are considering building a golf driving range and an outdoor swimming pool. The founders hope to stick to their core values of being the provider of the best recreational experience, meaning the new project should not diminish the quality of the said experience. James has been tasked to evaluate the proposed expansion from a financial perspective. The project would require an initial expenditure of $500,000. The club has agreed to sell the driving range and swimming pool for $50,000 at the end of 8 years. Furthermore, a survey has been commissioned at the cost of $70,000 to research the current recreational experiences market. As the project progresses, the club will expect certain operating costs and revenues on an annual basis. Such an annual income would be the income of $300,000 received as Membership fees. The fees are payable at the end of each year. Additionally, the club plans to host an annual fundraiser every December to raise an additional income of $120,000 to support the project. The project can be expected to incur specific overheads of $250,000 annually (this figure does not include depreciation). Furthermore, the club will incur an annual $50,000 as rent for the land where the buildings are being constructed. Upon partial completion of the project in Year 4, a cost of $25,000 will be incurred as payment to a Canadian association for inspection of the buildings being constructed. A similar charge will be incurred at the end of the project. The club generally considers non-financial factors when evaluating projects of this nature. It can be assumed that the number of members will be unchanged for the project's life. The club uses a cost of capital of 8% per annum to evaluate projects of this type. a) Calculate the internal rate of return (IRR) of the project.