Question MSC Devine is launching a maritime project by purchasing a small, previously owned cargo ship for R2.5 million which will be used to ferry iron ore across the Great Lakes. The ship will be depreciated over four years straight-line. Freight revenues and expenses from the venture are forecast as follows:

Year	Revenue (Rands)	Cash expenses (Rands)
1	500,000	800,000
2	1,000,000	800,000
3	1,500,000	900,000
4	2,000,000	1,000,000

Required Calculate the projects ARR and comment on its likelihood of acceptance by management. Also estimate project cash flows and calculate its NPV and IRR at 9% cost of capital. (15 Marks)