this is question 11.5 from Financial Management for Decision Makers by Peter Atrill, 8th edition.

Can anyone help please?

11.5 Leo plc is considering entering a new market. A new product has been developed at a cost of 5 million and is now ready for production. The market is growing and estimates from the finance department concerning future sales of the new product are as follows: Year Sales m 1 30.0 36.0 40.0 48.0 5 60.0 After Year 5, sales are expected to stabilise at the Year 5 level. You are informed that: the operating profit margin from sales in the new market is likely to be a constant 20 per cent of sales revenue AN the cash tax rate is 25 per cent of operating profit 1 replacement non-current asset investment (RNCAI) will be in line with the annual depre- ciation charge each year I additional non-current asset investment (ANCAI) over the next five years will be 15 per cent of sales growth 1 additional working capital investment (AWCI) over the next five years will be 10 per cent of sales growth. The business has a cost of capital of 12 per cent. The new market is considered to be no more risky than the markets in which the business already has a presence. Required: Using an SVA approach, indicate the effect of entering the new market on shareholder value