Q$2.$ The projected costs for a new plant are given below $($all numbers are in $${10}^6).$

Land cost $=$$$10$

Fixed capital investment $=$$$65($ $$25$ at end of year $1,$$$20$ at end of year $2,$ and $$20$ at end of year $3)$

Working capital $=$$$15($at startup$)$

Startup at end of year $3$

Length of time over which profitability is to be assessed $=10$ years after startup

Revenue from sales $=$$$30$ at end of year $4,$ $$60$ at end of remaining years $($from year $5$ to year $13)$

Cost of manufacturing $($without depreciation$)=$$$20$

Salvage value of the plant, $S=$$$0$

Tax rate $=25\%$

Depreciation method $=$ MACRS over $5$ years

After$-$tax internal hurdle rate $=11\%$ p$.$a$.$

For this project:

a$)$ Prepare a nondiscounted after$-$tax cash flow table and draw a cumulative $($nondiscounted$)$

after$-$tax cash flow diagram.

b$)$ From Part $($a$),$ calculate the following nondiscounted profitability criteria for the project:

Cumulative cash position and cumulative cash ratio

Payback period

Rate of return on investment

c$)$ Prepare a cumulative $($discounted$)$ after$-$tax cash flow table and draw a cumulative $($discounted$)$

after$-$tax cash flow diagram.

d$)$ From Part $($c$),$ calculate the following discounted profitability criteria for the project:

Net present value and net present value ratio

Discounted payback period

Discounted cash flow rate of return $($DCFROR$)$