QUESTION 2: (15 marks) a) Why is the search for new profitable projects so important? (3 marks) b) For a new project, Alliance Corp. need to acquire a new machine with initial investment of $500,000 installed and has a useful life of 10 years. Alliance expecting an after-tax cash flow of $90,000 per year for the duration of the useful life. BFN 2034 (BBA) JULY, 2020 CONFIDENTIAL 3/5 i. Calculate the net present value of the machine if the required rate of return is 11 percent. (4 marks) ii. Calculate the IRR of this project. (4 marks) iii. Should Alliance Corp. accept the project (assume that it is independent and not subject to any capital rationing constraint)? Explain your answer. (4 marks)