Question 1 1 a) An investment of 700,000 is expected to produce the annual net cash flows for the next five years specified in the tablc provided below. i. Determine the investment's net present value, if the required rate of return of 12 per cent, and the investment's internal rate of retum. ii. Focusing on this investment interpret the mouling of the net present value and the IRR. CASHFLOWS Year NCF 0 -700,000 1 160,000 2 200,000 3 250,000 4 250,000 5 240,000 1 b) As the finance director of a company, you have identified a profitable investment to be undertaken four years from now that will cost 240,000. While it is likely that the company could borrow the sum necessary to fund the investment you would prefer to finance the investment internally from retained carnings. You would like to know how much it would be necessary to save each year for the next four years if you have established that the savings could be invested to cam an interest rate of 6 per cent per annum Determine the annual savings necessary to accumulate 240,000 by the beginning of year four 1 c) You have decided to contribute 5000 per annum to a pension fund that guarantees a rate of retum of 4 per cent per annum on any contributions made to the fund. You plan to retire 18 years from now and to use the funds accumulated in the pension fund at the end of the 18 years to be able to finance an annual pension payment for the subsequent 16 years, your anticipated retirement period. Assuming that your contributions to the fund and the pension payments made by the fund will occur at the end of each year, determine the expected value of the annual pension payment you can expect to receive