QUESTION 1 (20 MARKS) Camden Limited is company which specializes in the manufacture of large scale replacement parts fo

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QUESTION 1 (20 MARKS) Camden Limited is company whichspecializes in the manufacture of large scale replacement parts forpassenger airplanes. The company is considering investingR40million in equipment which will generate a net cash flow ofR16million per year for four years. The company is able todepreciate the equipment at a rate of 20% per year on astraight-line basis for tax purposes. The market value of theequipment at the end of four years is expected to be R15 million.The difference between the market value and the equipment’s taxvalue (cost less depreciation to date of sale) is termed arecoupment which in this case is subject to tax. The corporate taxrate is 28%. The company’s cost of capital is 14%. Required:Calculate the project’s NPV and IRR of the project. Note: show allcalculations