=+8" (Examination level) Clipper ple is considering five project proposals. They are sum-

marised below:

Project Initial Annual Annual fixed Life of project mvestment revenue costs

(years)

(2000)

(£000)

(£000)

A 10 20 S

3 B

30 30 10 C

15 18 6

4 D

12 17 8

10 E

18 8

2 1.5 Variable costs are 40 per cent of annual revenue. Projects D and E are mutually exclu-

sive. Each project can only be undertaken once and each is divisible.

Assume