Inflated sales revenue 1
Inflated costs 1
Tax liability 1
Capital allowance, years 1 to 3 1
Balancing allowance, year 4 1
Capital allowance tax benefits 1
Timing of tax liabilities and benefits 1
Incremental working capital investment 1
Recovery of working capital 1
Market research omitted as sunk cost 1
Calculation of nominal terms NPV 1
Comment on financial acceptability 1

Max marks 12