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Question: a company is set up to refurbish old factories and...

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A company is set up to refurbish old factories and turn them into retail outlets. The company purchases 5 factories each costing half a million pounds. One factory is purchased at the start of each of the next 5 years. The cost of refurbishment is £20,000 per factory and is payable continuously for one year after the purchase. Once the refurbishment for a particular factory is complete, retail stores pay rent to the company for the factory at a rate of £48,000 pa payable monthly in arrears. Eaclh factory is sold 10 years after completion of its refurbishment for E600,000. The company employs a manager to run this project. She is paid £50,000 pa payable at the end of each month whilst the company has ownership of any of the factories. Calculate: (a) the net present value of the project assuming an interest rate of 4% pa effective the discounted payback period the accumulated profit on the day that the last factory is sold (b) (c)
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