JTM Airlines, a privately held firm, is looking to buy additional gates at its home airport for $1,200,000. It has money in the bank, but that money may not be spent as it is used to pay salaries, suppliers, and equipment. It asked its bank for a loan, but the bank refused unless the project had a return higher than JTM's weighed average cost of capital. Separately, PAN Airways' CEO approached JTM's CEO to sell the airline. As a result of all this, JTM has contracted you to 2. Aside from the purchase price the gates will require a working capital infusion of $1,200,000 at purchase JTM estimates the gates will generate cash flows of $305,000 inyear 1 inflating at 3%/year over the next 12 years After that, the gates will revert to the airport operator and 75% of the working capital is recovered Calculate the NPV and IRR of the gates. H Start C Year 1 D Year 2 Year 3 F Year 4 G Years H Year 6 ! Year 7 Years K Year Year 10 Year 11 Year 12 1 2 uvestment Working Capital Operating Cash Flow Total Cash Flow 6 NPV 8. TRR 5 9 10