RELEASED BY THE CI$,$ MGMT$2023,$ MARCH $2,20252$ Question $1(6$ marks$)$ King's Park, Trinidad is owned and operated by a private company, Windy Sports Ltd$.$ You work as the Facilities Manager of the Park and the CEO of the company has asked you to evaluate whether Windy should embark on the expansion of the facility given there are plans by the Government to host next cricket championship. The project seeks to increase the number of seats by building four new box seating areas for VIPs and an additional $5,000$ seats for the general public. Each box seating area is expected to generate $\backslash (\backslash$$ $400,000\backslash )$ in incremental annual revenue, while each of the new seats for the general public will generate $\backslash (\backslash$$ $2,500\backslash )$ in incremental annual revenue. The incremental expenses associated with the new boxes and seating will amount to $60$ percent of the revenues. These expenses include hiring additional personnel to handle concessions, ushering, and security. The new construction will cost $\backslash (\backslash$$ $15\backslash )$ million and will be fully depreciated $($to a value of zero dollars$)$ on a straight$-$line basis over the $5-$year life of the project. The company will have to invest $\backslash (\backslash$$ $2\backslash )$ million in additional working capital immediately, but the project will not require any other working capital investments during its life. This working capital will be recovered in the last year of the project. The center's marginal tax rate is $25$ percent. Use the following template to arrange your workings and answer the questions that follow. $\backslash$begin$\{$tabular$\}\{|$r$|$l$|$l$|$l$|$l$|$l$|$l$|\}\backslash$hline & Year $0$ & Year $1$ & Year $2$ & Year $3$ & Year $4$ & Year $5\backslash \backslash \backslash$hline $\backslash$begin$\{$tabular$\}\{$r$\}$ Initial $\backslash \backslash$ investment $\backslash$end$\{$tabular$\}$ & & & & & & $\backslash \backslash \backslash$hline $\backslash$begin$\{$tabular$\}\{$r$\}$ Working $\backslash \backslash$ capital $\backslash$end$\{$tabular$\}$ & & & & & & $\backslash \backslash \backslash$hline Revenue & & & & & & $\backslash \backslash \backslash$hline $\backslash$begin$\{$tabular$\}\{$r$\}$ Operating $\backslash \backslash$ expenses $\backslash$end$\{$tabular$\}$ & & & & & & $\backslash \backslash \backslash$hline $\backslash$begin$\{$tabular$\}\{$r$\}$ EBITD $\backslash$end$\{$tabular$\}$ & & & & & & $\backslash \backslash \backslash$hline Depreciation & & & & & & $\backslash \backslash \backslash$hline EBIT & & & & & & $\backslash \backslash \backslash$hline Tax & & & & & & $\backslash \backslash \backslash$hline $\backslash$begin$\{$tabular$\}\{$r$\}$ Net Income $\backslash$end$\{$tabular$\}$ & & & & & $\backslash \backslash \backslash$hline $\backslash$begin$\{$tabular$\}\{$r$\}$ Depreciation $\backslash$end$\{$tabular$\}$ & & & & & $\backslash \backslash \backslash$hline $\backslash$begin$\{$tabular$\}\{$r$\}$ Working $\backslash \backslash$ capital $\backslash \backslash$ flow from $\backslash$end$\{$tabular$\}$ & & & & & & $\backslash \backslash \backslash$hline FCF & & & & & & $\backslash \backslash \backslash$hline $\backslash$end$\{$tabular$\}$ RELEASED BY THE CI$,$ MGMT$2023,$ MARCH $2,20253$