Question 3 (Capital Budgeting Methods) (40 Points): Green Tech Solar Solutions Feasibility Study care over a 5-year Green Tech Solar Solutions, a leader in sustainable energy solutions, is considering a new project to set up a solar farm. The management is weighing the economic feasibility of this v horizon. They have gathered the following financial data: Initial Investment: The setup cost for the solar farm, including land acquisition, marketing efforts, is estimated to be $1.5 million. Projected Cash Flows: After conducting a market analysis and assessing the energy output of the planned solar panels, the projected cash inflows for the next four years are: Year 1: $450,000 Year 2: $500,000 Year 3: $550,000 Year 4: $600,000 Salvage Value: At the end of Year 5, GreenTech anticipates they can sell the land and remaining equipment for a total of $350,000. Discount Rate: The company typically uses a discount rate of 12% for projects of this nature. Instructions: a) (9 points) Compute the Net Present Value (NPV) of the project. b) (9 points) Calculate the Internal Rate of Return (IRR) to assess the potential return on this investment. c) (9 points) Determine the Profitability Index (PI) d) (9 points) Calculate the Discounted Payback Period to understand how long it will take for Green Tech to recover its initial investment in present value terms. e) (4 points) Given the provided data, make a recommendation on whether Green Tech Solar Solutions should proceed with the solar farm project.

Question 3 (Capifal Rudereting Methedr) (40 Foints): Green Tech Solar Solutions Feasilility Study horimo. They have gohered the following finacial das: Initial Investment: The setup cost foe the soler farm, inclading land acgisition equpoot, and inifil. marketing efforts, is estimated to be $15 million. Projected Cash Flows: Affer cenducting a market analysis and assesuing the enerpy oupto ef the planned solar panels, the projected canh inflows for the next four years are Year I: $450,000 Year 2:5500,000 Year 3: 5550,000 Year 4: $600,000 Sahage Value: At the end of Year S, Green Tech anticipates they ean sell the land and remaiming equipment for a total of $350,000. Discount Rate: The compary typically uses a discount rate of 12% for projects of this nature. Instructions: a) (9 points) Compute the Net Present Value (NPV) of the project. b) (9 points) Calculate the Internal Rate of Return (IRR) to assess the potential return on this investment. c) (9 points) Determine the Profitability Index (PD). d) (9 points) Calculate the Discounted Payback Period to understand bow loes it will take fox Green Tech to rocover its initial investment in present value terms. e) (4 points) Given the provided data, make a recommendation on wither Grece Tech Solar Solutions should proced with the solar farm projoct