Please compute in handwritten notes

Norbert Group of Companies (NGC) is made up of companies with various business portfolios. The Group is multifunctional and multidimensional, with subsidiaries and associates that can provide and sustain the provision of the basic needs and equipment to the Namibian nation at large. It prides itself as a group of wholly Namibian companies with the right personnel, expertise, and ability to procure equipment and render services efficiently. NGC is evaluating an investment proposal to manufacture Product New, which has performed well in test marketing trials conducted recently by the company's research and development division. The following information relating to investment proposal has now been prepared. Initial investment Selling price (current price terms) Expected selling price inflation Variable operating costs (current price terms) Fixed operating costs (current price terms) Expected operating cost inflation N$l million N$IO per unit 1.5% per year N$4 per unit N$70,000 per year 2% per year The research and development division has prepared the following demand forecast as a result of its test marketing trials. The forecast reflects expected technological change and its effect on the anticipated life cycle of Product New. Year Demand (units) 1 30,000 2 35,000 3 60,000 4 30,000 It is expected that all units of Product New produced will be sold, in line with the company's policy of keeping no inventory of finished goods. No machinery scrap value is expected at the end of four years, when production of Product New is planned to end. For investment appraisal, NGC uses a discount rate of 10% per year and a target return on capital employed of 20% per year. Ignore taxation. REQUIRED: Calculate the Net Present Value (NPV) for the investment proposal and advise whether the investment proposal is financially acceptable. Round a) off unit prices to two (2) decimal places and show your figures to the nearest N$I,OOO. Page 3 of 4 Using a cost of capital of 20%, calculate the Internal Rate of Return (IRR) for the investment proposal to the nearest whole number and advise b) whether the investment proposal is financially acceptable. show your figures to the nearest N$I,OOO. Calculate the Accounting Rate of Return (ARR) for the investment proposal c) to the nearest whole number. MARKS 16 5 4