Question 5+ Hill plc manufactures and sells car racing games for children through retailers and on-line retailers. It has operated successfully in the UK for several years and has been given the opportunity to produce and sell its products in China. This will involve building a production plant in the Shenzhen region of China. The initial investment is expected to cost $75 million on January 1st, 2019. The plant will be fully built and operational on this date. A licence also must be purchased on this date and will cost $4 million. Cash flows are expected to be positive, and a net inflow of approximately $25 per year is expected for the next four years. The licence will only last for four years and the government has made Hill plc aware that the plant will be taken over by the Chinese government on 31/12/2022 at nil cost. Hill plc's cost of capital is 8%. Its depreciation policy is to calculate it on a straight- line basis with nil residual value. Hill plc's current overall return on investment (ROI) is 11%. For information: ROI is calculated using controllable profit for the return value. Controllable profit is calculated as net cash flows less depreciation provision- ROI and Residual Income (RI) are calculated using the opening written down value of plant and licence assets in each year. The Net Present Value (NPV) for the investment is positive at $3.8m Required: a) Prepare a summary schedule for the proposed investment for each of the four years ending 31st December 2019 to 31st December 2022 which shows the estimated value of I. Controllable Profit per annum- ii. Residual income for years 1,2,3 and 4 iii. Return on Investment for years 1,2,3 and 4u (10 marks) b) Discuss the implications of your results in part a) above in terms of management decision making with regard to this project. Include the NPV figure in this discussion (10 marks) Total 20 marks