Q3. (15+10+5+5 marks ) You are the team leader of introducing a new product. It is lestimated that the sales team will be able to sell 600,000 units in the first year at an average price of INR 1500 per unit. It is further estmated that revenue will grow by 20% year-on-year for next two years and then by 10% and 5% in the next two years. The operating costs, other than depreciation and taxes, is expected to be 38% of revenue. This will need an initial investment of INR 210.00 crores in capital assets and INR 5.00 crores in working capital. Working capital in year 1 thru 5 will be 10% of revenue. The depreciation of capital assets will be 25% using WDV method. Tax on income will be 25%. At the end of the project's life of 5 years, the working capital will be liquidated at par and capital assets will be salvaged at INR 35.00 crores. The cost of capital for this project is 16.10%. Compute: a. Net Casth flows for all years (0 to 5). Page 1 of 2 b. NPV and advice if the project to accepted or rejected. C. If operating cost increases to 44%, will the project still be viable? Compute IRR