Kyros Plc is a multinational construction company. The company would like to invest in a project to increase capacity of production in one of its factories. The project has an initial cost of 10,000,000. The project is expected to last for 6 years and will generate the following cash flow. Period Cash flow 1 7,500,000 2 7,500,000 3 15,000,000 4 22,500,000 5 22,500,000 6 4,500,000 Cost of capital is set at 10%.

Required: (a) You have been asked by the financial director to calculate the net present value (NPV) of the project using a schedule of future cash flows. Comment on your findings.

(b) Calculate the payback period for this project and comment on your findings

(c) Base on your calculations provide a brief report recommending if Kyros Plc should embark on this project and why.

(d) What is net present value? Can it ever be negative? Explain.

Kyros Plc is a multinational construction company. The company would like to invest in a project to increase capacity of production in one of its factories. The project has an initial cost of 10,000,000. The project is expected to last for 6 years and will generate the following cash flow. Period 1 2 3 4 Cash flow 7,500,000 7,500,000 15,000,000 22,500,000 22,500,000 4,500,000 5 6 Cost of capital is set at 10%. Required: (a) You have been asked by the financial director to calculate the net present value (NPV) of the project using a schedule of future cash flows. Comment on your findings. (b) Calculate the payback period for this project and comment on your findings (c) Base on your calculations provide a brief report recommending if Kyros Plc should embark on this project and why. (d) What is net present value? Can it ever be negative? Explain