URGENT PLEASE ANSWER

Question 3: Panther Limited is proposing to invest in a new engineering process which will have an estimated life of five years and an initial cost of 55,000,000. The production is expected to produce a positive net cash flow per annum of 17,500,000 for the first 3 years and then 10,000,000 for the remaining 2 years. At the end of the five years, the equipment is expected to have a residual value of 8,000,000. Ignore the influence of taxation. Required Write a report to the management appraising the proposed investment using the following methods: a) Payback period [3 marks] b) Net Present Value (NPV) [8 marks] c) Internal Rate of Return (IRR) [6 marks] Assume that the weighted average cost of capital used by this company to discount its cash flows is 9%. Use a discount rate of 15% for IRR. d) Comment on the best method of investment appraisal used. [8 marks] [Total 25 marks]