Superb Contractors plc is exploring the purchase of a used building, costing 1.13 million, to manufacture steel frames for decorations. The firm appointed a marketing consultant who spent the last two months examining the potential of these frames. The marketing survey costs incurred to date are 0.3 million. The consultant has advised the company will require equipment costing 13 million in order to commence operations and that this equipment can be sold for 3 million in four years time when the plant will shut down. The building is to be returned to the owner in four years' time. The accounts supervisor has prepared the following projected profit and loss accounts for each year of the life of the project. Projected Profit and Loss Accounts (m) The accounts supervisor recommends that the company should not proceed with the acquisition of the building. The following additional information is available: (i) The project will require an investment of 0.5 million of working capital from the beginning of the project until the end of its useful life. (ii) The wages and salaries expenses include 0.4 million of working capital in Year 1 for staff who is already employed by the company but who would be without productive work until Year 2 if the project does not proceed. However, the company has no intention of dismissing these staff. After Year 1, these staff will be employed on another project of the company. (iii) 5/6 of the head office expenses consist of amounts directly incurred in managing the new project and the balance *** represents an apportionment of other head office expenses to the project to ensure that it bears a fair share of these expenses. (iv) The marketing survey costs include those costs already incurred to date, and which are to be written off in the first year of the project, as well as costs to be incurred in the first year if the project is accepted. (v) The interest charges relate to finance required to purchase the equipment necessary to carry out the project. (vi) After the accounts supervisor has provided you with the projected profit and loss accounts, the sales director commented that the forecasted sales figures are to be moderated by the 2 possible selling prices and hence the revised sales data is as follows: These forecasts have no impact on the rest of the data gathered. The company has a cost of capital of 12 percent. Ignore taxation. Required: (a) Justify the accounts supervisor's recommendation. (b) Derive the cash flows for years 0 through 4 for this project, and calculate the project's Net Present **** Value. (c) State, giving reasons, whether you think the project should proceed