Question B2 A manufacturing plant is proposing a project to reduce it energy consumption by purchasing and installing a Combined Heat and Power (CHP) system. The company estimates the CHP system costs, revenues, and savings over 5-years are shown in Table B2. Purchase and installation. Operation and maintenance Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 -37,000 Fuel cost Revenue (electricity) Savings (heat) Table B2 221 221 221 221 221 1,587 1,587 1,587 1,587 1,587 5,920 5,920 5,920 5,920 5,920 4,410 4,410 4,410 4,410 4,410 a) Using a discounted payback method, calculate the overall return for the project based on a rate of return of i) 3% and ii) 8%. Comment on the viability of the proposal. [15 marks] b) Estimate the Internal Rate of Return (IRR). Explain what the result means in terms of the project viability. [10 marks]