Muno plc is a Zimbabwean manufacturing company who are considering expansion into the UK. They have been looking at a possible factory site in the Midlands area in England. Due to the unstable political situation in the UK, they expect to sell the factory they buy after 5 years. The factory and machinery will be bought outright for 800,000. The factory building is worth 200,000 and machine makes up the balance of the purchase price. The factory building will not fall in value during the project and the full amount will be recovered on sale. The machinery has a residual value of 27,000 The annual cash flows are as follows: - Sales revenue 195,000, increasing by 8.5% each year Running costs 8500, increasing by 6.5% each year. Other expenses include 650 per month for variable overheads. This value will increase by 2% every year. The company has a current cost of capital of 10%. Muno use a template for their calculations and this can be found on the link below; Capital Budgeting Template (click to download) a) Calculate the NPV (Net Present Value) of the new machine. Please enter your answer with no sign and no decimals. If the number is a negative value, include the minus sign e.g. -100000 Do not round the discount factors, use 3 decimal points Make use of the template provided above and do not round off your calculations until the final answer. *IF YOU CANNOT SEE THE FULL TABLE, YOUR WEB BROWSER IS ZOOMED IN. YOU NEED TO ZOOM OUT TO SEE THE FULL TABLE. b) Calculate the payback period for the new machine. Years months