only answer part (b)

The end-of-year financial projections, tabulated below, have been prepared for a proposed manufacturing plant, which requires a fixed capital investment of 40 MS at the start of Year 1 (i.e., on the start-up date). The working capital requirement is variable and can be taken as the value of the stock of raw materials i.e., the working capital at the start of each year can be taken to be equal to the raw material stock for that year. Revenues and costs can be considered to arise at the end of each ear 4 Revenue, M$/y Fixed costs, M/y (excluding depreciation) Operating costs Stock of raw materials, M$ 26 24 28 30 24 2 4 10 16 12 The depreciation charges should be calculated using the sum-of-the-years-digits method with a useful life of 5 years and a salvage value of 4 M$. Any remaining working capital can be assumed to be recovered in full at the end of year 5 . The income-tax rate is 30% a) Determine the rate of return based on the value of the average annual after tax profit and the total capital investment at start-up b) Calculate the net present worth using an interest rate of 10% per year for the time value of money