Grace Ltd is planning its capital budget for 2018 and 2019. The company’s directors have reduced their initial list of projects to five, the expected cash flows of which are set out as follows:

Project 2018 2019 2020 2021 NPV 1 -60,000 +30,000 +25,000 +25,000 +1,600 2 -30,000 -20,000 +25,000 +45,000 +1,300 3 -40,000 -50,000 +60,000 +70,000 +8,300 4 0 -80,000 +45,000 +55,000 +900 5 -50,000 +10,000 +30,000 +40,000 +7,900 None of the five projects can be delayed, and all are divisible. Cash flows arise on the first day of the year. The minimum return required by shareholders of Grace Ltd is 10 per cent p.a. Which projects should Mace Ltd accept if the capital available for investment is limited to £100,000 on 1 January 2018, but readily available at 10 per cent p.a. on 1 January 2019 and subsequently?