SUBJECT 1

*** Please do the calculations analytically on excel don't just post functions :) A photovoltaic production company is considering the creation of a solar Led projector new generation with an operating time of 8 hours. Table 1 shows the provisions financial data resulting from market research. For this investment additional mechanical equipment worth 200,000 is required, transport costs of 3,000 and installation costs 2,500. The useful life of the machines as well as the product life cycle is 5 years. At the end of the year the machines will be sold instead of 30,000.

	Years
	1	2	3	4	5
Sales in units	1500	2500	4000	3000	1500
Average variable cost per unit	13	17	20	20	20
Price per unit	40	45	50	50	50
administrative and disposal costs	2000	2500	3000	3500	3000
working capital	2000	2500	2000	1500	1000
	Years
	1	2	3	4	5
Sales in units	1500	2500	4000	3000	1500
Average variable cost per unit	13	17	20	20	20
Price per unit	40	45	50	50	50
administrative and disposal costs	2000	2500	3000	3500	3000
working capital	2000	2500	2000	1500	1000

The corporate tax rate is 22%, the cost of capital is 8% pa basis and the company applies the straight line method in the calculation of depreciation. Assuming that the annual cash flows occur at the end of each year, you call: A) Calculate the net cash flows per year. (Grades 1.5) B) To evaluate the above proposal using the Net Present Value method (KPA). (0.50 points) C) To evaluate the above proposal using the Internal Rate of Return method (EBA). (0.50 points)