The Insect Control Inc. (ICI) has hired you as a consultant to evaluate the NPV of its proposed toad ranch. ICI plans to breed toads and sell them as ecological desirable insect control mechanisms. They anticipate that the business will continue into perpetuity. Following the negligible start-up costs.

ICI expects nominal cash flows at the end of the year as follows: Revenue GBP150,000 Labourcosts GBP 80,000 Other costs GBP 40,000

The company will lease machinery for GBP20,000 per year. The lease payments start at the end of year 1. Revenue will increase by 5.00 percent per year in real terms. Labourcosts will increase by 3.00 percent per year in real terms. Other costs will decrease by 1.00 percent per year in real terms. The rate of inflation is expected to be 6.00 percent per year. ICI’s required return is 10.00 percent in real terms. The company has 34.00 tax rate. All cash flows occur at year-end. What is the NPV of ICI’s proposed toad ranch today.