Your company, Mumias Sugar Factory, is considering the modernization of its factory in Kakamega County, in order to increase its productivity. The estimated initial cost of this Project (the modernization of the factory) is 2,200,000. The estimated (end of year) net income (revenue minus all costs except initial costs) of the existing and the modernized factories for the next seven years are given below in Table Q5. The project life (operation of the modernized factory) is x years. MARR (the minimum attractive rate of return) for the company is 8%. Salvage values are zero for the existing plant and 600,000 for the modernized plant. "Transforming Lives through Quality Education" Page 4 of 5