(Show all your calculations along with well labeled cash flow diagram) CPG PETE 407 Oil Corporation has discovered oil at a location 15 miles north of Dhahran, Saudi Arabia. Initial investment of $10,000,000 is needed for the estimated production of 50,000bbls/year with production declining by 5,000bbl/year. Operating costs will be $500,000/year (Initial Project). Alternatively, Reservoir Engineering Department believes that production can be increased back to 50,000bbls/year at the end of year 6, again followed by a decline of 5,000bbl/year from there on. This advanced recovery technique would need an additional investment of $5,000,000 at the end of year 5. Operating costs are to remain constant at $500,000/year. Assume all production values are end of the year values. Company uses 10% as a suitable interest rate. For the steady oil price of $100/bbl and ten-year analysis period: a) Calculate the NPV of the Initial Project. b) Calculate the NPV of the Advanced Recovery Project. Is the additional investment in Advanced Recovery Project justified? c) If the company was able to maintain the production at a steady rate of 30,000 bbls/year for 10 years, with the initial investment of $10,000,000 and the operating costs of $500,000/year, what is the rate of return on this investment