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Part $1$

AdventureParks Ltd is evaluating the construction of a new theme park. The theme park would cost $ $504$million$,$ but would operate for $20$ years. AdvertureParks expects annual cash flows from operating the theme park to be $ $68\mathrm{.}3$ million and its cost of capital is $11\mathrm{.}3\%.$

a$.$ Prepare an NPV profile of the purchase.

b$.$ Identify the IRR on the graph.

c$.$ Should AdventureParks go ahead with the$$ purchase?

d$.$ How far off could$$ AdventureParks' cost of capital estimate be before your purchase decision would$$ change?