Kent Football Club has had a successful season. Championship victories have guaranteed a place in the European Cup for next year, a year that will see the possible purchase of the internationally renowned player Mario Paperelli. The purchase of Paparelli is at a delicate stage. Figures have been compiled as follows. Purchase considerations for RM1 million Annual salary paid in cash RM100,000 per annum Contract length 5 years (Assume no transfer value at end of contract) Extra cash receipts from season ticket holders RM320,000 per annum Extra cash receipts from turnstile collections RM280,000 per annum Additional capital investment (Year 0) RM50,000 Additional cash expenses RM40,000 per annum Ideally the Club would like a 15% return on the investment. The present values at 15% and 50% are: Year 1 2 3 4 5 15% 0.870 0.756 0.658 0.572 0.497 50% 0.667 0.444 0.296 0.197 0.132 Required: For the proposal calculate the: (a) Net present value (7 marks) (b) Internal rate of return (5 marks) (c) Payback period (4 marks) (d) Accounting rate of return on average capital (4 marks) [20mark]