Q:4/ Super Dairy Ltd. is planning to buy dairy equipment costing Rs 600 lakh. Milk Board provides 20% subsidy on fixed capital cost. It can process milk to produce cheese with the capacity of 2500 tons per annum. The selling price of cheese is taken as Rs 75 tons per annum. The management expects the life of the plant at 8 years and the depreciation policy is written down value @ 30%. However, the plant can be sold at Rs 150 lakh at the end of its useful life. The utilization of plant is expected as below: Years 1 2 3 4 to 8 Capacity utilization 40% 50% 60% 80% The contribution margin is expected to be 40.00%. The variable cost constituting primarily of the raw material, milk is placed at 60% while the fixed expenses are Rs 200 lakh per annum. The additional working capital required is Rs 50 lakh and WACC is 15%. The firm pays 35% tax. Find the following: A. Cash flows of the project from Year 0 to Year 8 B. NPV of the project C. IRR of the project D. Payback period E. Should the project be accepted based on NPV and IRR [2+2+2+2+2]