You have just started a new business firm dealing with Geomatics, and you are expecting a financial profit from a contract offer of a private sector project dealing with geodesy and photogrammetry. The project under consideration must be completed in three years; it requires a cutting-edge technology GPS receiver (total cost of a single receiver is $9,999) and a platform for light weight UAV including photogrammetric equipment such as high resolution camera, gimbal, batteries, other sensors etc. (total cost of UAV platform and equipment is $45,251). The project is expected to bring in annual revenue of $85,000 given as actual dollars; however, with an additional annual O&M cost of $42,100 in today's dollars. The project requires an investment in working capital in the amount of $4,000 at year 0. Working capital investment is subject to the general inflation rate and this investment will be recovered after the project is terminated. All equipment which will be bought falls into the MACRS five-year class, and once the project is completed, all of the equipment can be sold for $19,000 in today's dollars. Because you have just recently started-up the firm, the project will be fully funded by a bank loan at an interest rate of 18% (also equal to market interest rate) over a three-year period. The firm will make equal annual payments to pay off the loan. You expect a general inflation rate of 10% per year during the project period, and the firm's marginal tax rate is 40%. a) Construct the cash flow of this project (with taking into account the taxes) (30 points). b) Compute the net present worth of this project at year 0 (20 points). c) Compute the internal rate of return of this project? (20 points) a) Is this project acceptable? and why? (10 points) e) Assuming a worst case scenario of 15% decrease in revenue in actual dollars and a 5% increase in O&M costs in today's dollars (both will simultaneously affect the project), how will the net present worth of this project at year o be affected? (20 points) Note: "market interest rate" = "inflation-adjusted MARR