The Executive Assistant (EA) to CFO of ABC Ltd was given the task of analysing the value of a renovation project for Plant A. The forecasts, as provided below, was presented to the EA by the Plant Manager. All values are in INR million. The Corporate Tax rate is 25%.

Year	0	1	2	3	4	5
Initial Investment (CAPEX)	500
Revenues		300	325	350	350	250
Variable Costs		75	81.25	87.5	87.5	62.5
Depreciation		100	100	100	100	100
Fixed Costs		10	10	10	10	10
Interest Expense		15	15	15	12	12
Net proceeds to debt	100
Principal on Debt which is repaid				20		80
Change in Operating Net Working Capital		50	250			-300

Project the free cash flow to the equity holders with the above data for all the years from Year 0 to Year 5. If the cost of equity is 15%, what is the value to the renovation project for plant A ? Should they go ahead with renovation ? Why or Why not ? There are No preferred equity holders.

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