An inner city amateur theatre company, Theatre Empire, is planning on performing a new take on two Shakespearean plays, Hamlet and Macbeth, at an old Brisbane theatre in the inner-city suburb of South Bank. The producers of the theatre plan on alternating the performances of the two plays for a combined total of 40 weeks, if possible. Given the size of the theatre and the expected seat-sales rate, the producers think they can gross $420000 at the box office. The plays will cost $48000 to mount in the first place to cover the costs of new sets, costumes and props, and the weekly running costs are expected to be $5500. Assume for the NPV that all funds are earned and paid, except the mounting costs, at the end of the 40 weeks. The sets, costumes and props are expected to realise $26500 at the end of the run.

Required
(a) What is the ARR?
(b) What is the PP?
(c) What is the NPV if the producers can earn 12 per cent elsewhere on their funds?
(d) Would you advise the producers to go ahead or not? Why?