The board of Mutengo Plc is reviewing a purchase decision for an investment proposal and the company has provided the following projections for your input.

Year	1	2	3	4	5
Units sold/Produced	2,000	1,500	2,400	3,000	4,000
Unit Selling Price (K)	400	550	620	780	800

Additional information:

The company has been offered to purchase and existing pine tree plantation from an investor selling the business. The trees are ready for harvesting and the project is expected to last for five (5) years after acquisition.

It initial capital to buy the asset is set a 40% of the total revenue expected from the sale of timber on the project. The negotiated tax rate is 2% of the sales revenue for each year. The fixed costs for each year is 25% of the total variable cost of production for per annum. The company has a target Cost of Capital of 8% for project of this nature. Note: Prior years tax is paid the following year.

Required:

Appraise the project viability using Net present Value (NPV) and comment on the project.