Question: The management team of Solar-X, a UK manufacturer of solar panels, is considering entering the automotive industry to produce cars. As a member of the finance department in Solar-X, you have been asked to conduct some preliminary research and analysis on this project.

Task 2 (50%): Conduct a project evaluation to assess whether this new entering to the automotive industry project is worth going ahead or not. Your report should be less than 1200 words.

• You are expected to apply appropriate approaches to conduct an investment feasibility study and produce an evaluation report. Different investment appraisal approaches (at least two) should be chosen and discussed.
• Illustrations with numerical calculations based on your own estimated data are required. You need to set up your own estimations on the project related elements/factors (e.g. project length, project size, potential revenues, relevant costs, financing channels, tax rates, estimated cost of capital, etc.).
• You need to show and explain in detail all the steps for your numerical calculations.
• Detailed discussions on how relevant elements/factors would potentially affect the evaluation results should be included.

Task 3 (30%): Discuss whether capital markets are efficient or not and how a public announcement of this new project would affect the market value of Solar-X. Your report should be less than 800 words.

• You are expected to discuss the Efficient Market Hypothesis (EMH) and link the theory with the practical exercise.
• Your arguments should be supported by empirical evidence (i.e., cite relevant academic papers).
• Consistent referencing style should be used (e.g., Harvard referencing style).