Question 1 Richard and Kenneth established an engineering consulting company (named R&K Engineering & Consulting Co. Ltd.) today. It covers a wide range of structural, civil, and geotechnical engineering services in Hong Kong. The initial investment for this business is $1,000,000. The net cashflow at the end of the first year of business is forecast to be only $200,000. But it is expected that the net cashflow will increase at a rate of $10,000 per year starting from the end of Year 2 (EOY 2). (a) Draw a cash flow diagram for the first 9 years. (5 marks) (b) Based on MARR of 10% per year, what are the Present Worth (PW) AND the Annual Worth (AW) of ALL the cashflows for the first 9 years? Round off your final answer to the NEAREST integer. (8 marks) (c) If the business is sold for $2,000,000 at the end of Year 9 (EOY 9), can we say this business have achieved an internal rate of return (IRR) greater than 25% per year? Why? (8 marks) (d) (i) If Richard secretly partners with ABC Engineering Company to bid a project which R&K Engineering & Consulting Co. Ltd. is also bidding. Identify the type of ethical issues in this situation. (ii) Suggest ONE preventive measure for the situation. (2 marks) (2 marks)