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A local university has decided to embark on a project to invest in a new building The building will provide accommodation and teaching facilities for 300 extra students. The building provides the following costs and benefits Costs Initial building costs of 11,700,000 + 9,000x which are spread evenly and continuously over the period from 1 January 2018 to 1 July 2019. Extra staff and maintenance costs of 500,000 per annum incurred annually in advance for 10 years from 1 January 2020 . Benefits Rent from each student payable monthly in advance for 10 years from 1 January 2020. The monthly rent is 400 per student Extra tuition fees for each student payable annually in arrear for 10 years from 2020 i.e. the first fees are payable on 31 December 2020. The extra annual fees per student are 3,000 in 2020, 3,500 in 2021 and increase by 500 each year. . Calculate, using an effective interest rate of 12% per annum, the present value as at January 2018 of (i) the building costs (ii) the staff and maintenance costs (iii) the rental income (iv) the tuition fees Hence calculate the net present value as at 1 January 2018 for the project using an effective risk discount rate of 12% per annum and determine whether the project is worth undertaking a) b)