Question $7$: Capital Budgeting $(15$ marks$)$

Star Bar plc currently manufacture computer parts and wholesale them to computer assembly firms. The senior management team believe that they have identified an opportunity and would like to enter the wearable computing market. The products being considered are body$-$borne computers, for example, miniature electronic devices that are worn by the bearer under, with or on top of clothing. This move would be expensive. Amongst other expenditures, the company would need to acquire new machinery, recruit skilled workers and incur design and engineering costs. The rewards, however, are potentially huge. Therefore a full appraisal of this investment is required.

You have been provided with the following information:

$\backslash$table$[[$Sales revenue,$\backslash$table$[[$First unit sold for either $200$ or