kindly provide the solution for this Question, I have an idea of how to work it, but I'm confused about the opportunity cost of the Land..

Page 2 of 13 OUESTION 1 Tota Limited manufactures motor vehicle components. It is considering introducing a new product. Tanagna Badree, the production director, bas already prepared the following projections for this proposal: 2016 2017 2018 2019 r3000) r8000) (8000) (000) 8.750 12,250 13.300 14,350 1.340 1,875 2,250 2,625 Sales Direct materials Direct labour Variable overhcads Depreciation Fixed Overheads Total expenses Profit before tax Corporate tax @30% Profit after tax 3,750 250 185 2,250 2,250 2,250 2,250 1.012 1012 1012 1.012 1712 9,387 10.512 11637 1,038 2,863 2,7882.713 31) 1859)(8361814) 727 2.004 1.952 1899 Tanagna Badree bas recommended to the board that the project is not worthwhile because the cumulative after tax profit over the four years is less than the capital cost of the project and hence the retum on investment seems less than acceptable. As an assistant accountant at the company you have been asked by Anala Largen, the chief accountant, to carry out a full financial appraisal of the proposal. She does not agree with Tanagna Badree's analysis, and provides you with the following information; . The manufacturing plant will cost 59 million and is expected to be constructed on lands that the company bought some land three year ago. r .That land mentioned above was purchased for $2.5 million three years ago in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $3 million. In four years, the after-tax value of the land is expected to be $3.5 million. . Working capital of S1,000,000 will be required at the beginning of the project; The additional working capital will be recovered in full as cash at the end of the four-year peri The Usiversity of the West Indies INBA 6375 ugust 2016