You have been asked to analyse the financial feasibility of a ranch. Consider the following.

The ranch will produce cattle to be sold for their meat.

The cows will give birth to calves (baby cows), which will be fed until they are big enough to be sold.

The number of bulls required depends on the number of cows. A bull is needed for every 50 cows or fraction thereof.

The operators of the ranch will rent the land for 30 years, the rental price is $250,000 per year

There will be 300 cows in the ranch Cows can give birth once a year (but not all cows give birth every year).

Each year an average of 80% of the cows will give birth. It takes 2 years for a calf (baby cow) to grow to the size required for it to be sold, from 20 kg to 550 kg

Bulls have a productive life of 15 years, cows have a productive life of 10 years

Bulls weigh on average 900 kg, cows weigh on average 500 kg

The average selling price of a calf is $41 per kg.

The average selling price of an unproductive cow or bull is $35 per kg.

A productive bull costs $60,000, a productive cow costs $35,000.

Each bull eats 2 kg of food per day, each cow eats 1 kg of food per day Calves need to eat 1 kg of food per day plus an additional 1.2 kg for every kg of weight they gain Cattle food costs $2.5 per kg

All animals need to be vaccinated twice a year. Vaccines cost $0,000 per animal.

The ranch requires 3 full-time employees to operate, their combined salaries are $30,000 per month

There are some constructions that need to be made, the total cost is $4 million After the lease expires, the construction will belong to the owners of the land, and no money will be recovered Both heavy-machinery and light-machinery need to be bought

The cost of the heavy-machinery required is 400,000.

The lifetime of the heavy-machinery is 15 years The cost of the light-machinery required is 80,000.

The lifetime of the light-machinery is 5 years The salvage value of the machinery is 10% of its purchasing price (the same for all machinery)

Part 1 (PLEASE USE EXCEL) a) Create a table that shows how many animals there will be (separated by type) at any given year b) Calculate the Cashflows c) Calculate the NPV and IRR d) Considering all the information up to this point, what is your recommendation regarding this project? Why?