Please Solve the following assignment for an Intro to Finance Class

Week 12 Financial Project BA312 Consider the following potential project. Once completed answer the following questions associated with the project. You are considering starting a lemon aid stand. Over the next 4 years you expect sale to be 100 per year, operational costs are $50 and depreciation is $25. You initially expect to spend $100 on depreciable assets and $20 on net working capital that you will recover when you sell the stand in year four for $50. Your tax rate is 50%. You determined that the project is 20% riskier than the general market and therefore has a beta of 1.2. The return on the market is expected to be 8% and the risk free rate is expected to be 2% Because the project is small only one person is expected to be employed. The individual may slack off, steel or simply underperform because of a lack of accountability. To fund the project you expect to get of the funding from a bank and half from equity investors. When completing your analysis you assumed 100% equity, because your funding choice should not impact the analysis (the average interest and payments to equity holders will be the same). Answer the following questions using core financial concepts as the basis for your response. In cases where there may be inadequate information please surmise or provide an intuitive guess regarding the response or information requested. 1. How would you quantify the risk level of the project being considered? (For example what is the probability you think the project will succeed? 2. What is the probability it will fail?) 3. Would you expect your project to have more or less risk than the overall stock market, why? 4. What rate of return do investors expect from the market? 5. What rate of return do investors expect from your project? 6. Where will the money come from to fund the project? 7. How much will you pay in interest to these funding sources? 8. What cash flows do you expect to receive from the investment and when do you expect to receive those cash flows? 9. Compute the NPV (net present value), IRR, and payback of the investment and discuss the implications of the computation. 10. Compute relevant ratios that provide information regarding each of the following areas liquidity, asset management, leverage (debt), profitability, and market value. 11. Discuss and evaluate these ratios. 12. What are agency problems that may exist within your company? How can these issues be mitigated