The estimated revenue returns for Investment Project P are as follows:
£1,300,000 in year 1
£2,000,000 in each of the years 2 to 7
£0 in year 8 and subsequent years.
The repair and maintenance costs are expected to be £250,000 in each of the first seven years.
(a) Calculate, for Investment Project P, the:
(i) estimated revenue return net of repair and maintenance costs in year 1
(ii) total estimated revenue returns net of repair and maintenance costs for the first seven years
(iii) average estimated revenue returns net of repair and maintenance costs over the first seven years.