PART C (40\%) Zipline is a proposed new tourist attraction in Chimgan Mountains near Tashkent. The relevant information and data for the new Zipline attractions are as follows: a. The new equipment costs $40,000 and is usable for 6 years. b. $3,000 has been already spent on confirming the legal feasibility of the business idea. c. Running and maintenance costs will amount to $6,000 per annum. d. Working capital requirement in total have been estimated as follows; $1000 at start increasing at the rate of $1000 per year till start of year 6 . e. All $6000 working capital will be released /recovered at the end of project. f. Zipline is expected to generate $30,000 in the first year and $33,000 per year from the second year onwards till year 6. g. Zipline will have to incur additional fixed cost of $11000 per year directly as a result of this project. h. \$5,000 of annual fixed cost will be allocated from general cost to this project. i. The equipment can be sold at $3,000 at the end of its useful life. MDIS SINGAPORE - UOS Financial Management \& Control Individual Assignment j. Annual tax payment for this project is expected to be $2,000 for first year and growing at a rate of $1,000 per each year. k. The project will be financed by borrowing $50,000 at 8% interest per annum. 1. The required rate of return for the project is 10%. REQUIRED: i) For the proposal of Project, Zipline, show relevant cash flows from the project. Justify exclusion of each irrelevant cash flow. (20 marks) ii) Calculate (with detailed workings); a) Accounting Rate of Return (on initial investment) b) Payback Period c) Discounted payback period. d) Net Present Value e) Profitability Index f) Internal Rate of Return (IRR). (Use 10% \& 20% to approximate IRR) (12 marks) ii) Calculate (with detailed workings); a) Accounting Rate of Return (on initial investment) b) Payback Period c) Discounted payback period. d) Net Present Value e) Profitability Index f) Internal Rate of Return (IRR). (Use 10% \& 20% to approximate IRR) (12 marks) iii) Critically evaluate four (4) ways in which risk can be considered or incorporated in evaluation of project such as above. (8 marks)