The Board of Directors of Bermuda Corporation has received the below presentation supporting a $6,000,000 investment in a new Australian-made automated production line producing fibre- reinforced polymer (FRP) pipes to capture the market for the replacement of old steel pipes in the Asia-Pacific region, especially Malaysia. The calculations for the accounting rate of return, payback and discounted cash flows are shown below. Accounting rate of return Year 0 Year 1 Year 2 Year 4 Year 3 $ Year 5 $ $e Initial investmente -6,000,000 Depreciation @ 20% Book value at year ende e Cash flows Profit Return on Investment (ROI) Average profits $500,000 Average investment $3,000,000 Average ROI 16.7% 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 4,800,000 3,600,000 2,400,000 1,200,000 0 1,500,000 2,500,000 2,000,000 1,500,000 1,000,000 300,000 1,300,000 800.000 300,000 -200,000 6.3% 36.1% 33.3% 25.0% e Year 1 Year 2 Year 0 -6,000,000 Year 3 Year 4 Year 5e Payback Initial investment Cash flows Cumulative cash flowe Payback 1,500,000 2,500,000 2,000,000 1,500,000 1,000,000 1,500,000 4,000,000 6,000,000 = 3 years Net present value Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Cash flows -6,000,000 1,500,000 2,500,000 2,000,0001,500,000 1,000,000 Net present value @10% $577,823 The internal rate of return (IRR) is 14% Required: Discuss FIVE (5) issues that you would draw to the attention of the Board of Directors of Bermuda Corporation in considering these figures in this investment proposal in deciding whether to go ahead or not? [Total 25 marks]