. MTC-Register you... < Inbox 2:48 PM Year 1 Year 2 Year 3 Year 4 31% KB company is a wholesaler of books which is keen to explore the financial implication

of making a significant investment in equipment and the development of website. Due to the fast-changing nature of the equipment and the internet software. KB's management has set a project lifetime of 4 years, i.e, the equipment will replaced, and the new website designed. An amount of N$ 300 000 will be paid to the new equipment at the beginning of the project. The company's costs behave in such a way that its contribution on sales ratio is expected to be 40% and its margin 10% Sales estimates are shown below: Total sales if no investment N$ 000 12 400 13 250 13 620 14 000 V Total sales with investment N$ 000 12 950 13 380 14 340 15 000 Variable cost selling price are expected to remain stable in order to remain competitive over the duration of the project. Initial working capital of N$ 20 000 will required at the start of the project. The suppliers will be paid a retaining /advisory fee of N$120 000 in year 1, N$ 150 000 in year 2, N$ 170 000 and N$ 190 00 in year 3 and 4,respectly. The residual value at the end of the project will be N$ 30 000. KB paid consultancy fee of N$ 150 000 experts who worked on the equipment. REQURED/n. MTC-Register your S... < Inbox equipment and the internet software. D management has set a project lifetime of 4 years, i.e, the equipment will replaced, and the new website designed. An amount of N$ 300 000 will be paid to the new equipment at the beginning of the project. The company's costs behave in such a way that its contribution on sales ratio is expected to be 40% and its margin 10% Sales estimates are shown below: Year 1 Year 2 Year 3 Year 4 2:48 PM Total sales if no investment N$ 000 12 400 13 250 13 620 14 000 @31% Total sales with investment N$ 000 12 950 13 380 14 340 15 000 V Variable cost selling price are expected to remain stable in order to remain competitive over the duration of the project. Initial working capital of N$ 20 000 will required at the start of the project. The suppliers will be paid a retaining /advisory fee of N$120 000 in year 1, N$ 150 000 in year 2, N$ 170 000 and N$ 190 00 in year 3 and 4,respectly. The residual value at the end of the project will be N$ 30 000. KB paid consultancy fee of N$ 150 000 experts who worked on the equipment. REQURED Using the Net Present Value (NPV) technique to evaluate whether KB should go ahead with the project or not. (30 marks)