Suppose you are a capital budgeting expert in a consulting company. Your potential client, the Sun Devil Cookie Company, is considering the construction of a bakery to produce a new type of chocolate chip cookie that is free of both cholesterol and saturated fat and has 2 calories per cookie. The bakery is expected to last for 25 years. Its initial cost is $80 million. This cost can be depreciated over 15 years in nominal terms using straight line depreciation to a value of zero. After 15 years the bakery needs to be renovated. The cost of renovation will be $20 million in real terms and can be depreciated (again using straight line depreciation to a value of zero) over the remaining 10 years of the bakerys life. The salvage value of the equipment at the end of the project will be $1 million in real terms. The land the bakery is built on could be rented out for $1.25 million a year in real terms for 25 years with the rent collected at the beginning of each year. The bakery will be able to produce 25 million packets of cookies per year. The price of a packet of cookies is currently $2.75. It is expected to grow at a rate of 5% per year in real terms for the first 2 years, then at 2% per year in real terms for 4 years, and finally at 0% per year thereafter for the remainder of the bakerys life. The basic ingredients for a package of cookies currently cost $0.75. These costs are expected to grow by 1% in real terms through the lifetime of the project. The labor required to operate the bakery is expected to cost a total of $11 million dollars in nominal terms during the first year and this is expected to increase at 4% in real terms thereafter. The level of working capital for the project is $18 million at year 0 and this is expected to increase at 3% in real terms per year. At the end of the project (year 25), the working capital can be fully recovered. The rate of inflation is expected to be 2% per year for the bakerys life. The firms total tax rate including local taxes is 35%. Its opportunity cost of capital for projects of this type is 12% in nominal terms. Prepare an analysis of this capital budgeting problem, in which you compute the Net Present Value using nominal terms. Pay special attention when converting real terms to nominal terms.