$1)$Teck Engineering normally expects a minimum rate of return of $12\%$ on investments. Two projects are available but only one can be chosen. Project A requires an immediate investment of $$4,000,000.$ In return revenue payments of $$4,000,000$ will be received after $4$ years and

$$9,000,000$ after nine years. Project B requires an investment of

$.,$$$4,000,000$ now and another $$2,000,000$ at the start of the third year. In return revenue payments will be received in the amount of $$1,500,000$ per year for nine years.

a$)$Calculate the NPV of both projects. $(6$ Marks$)$

b$)$Calculate the ROI of both projects. $(4$ Marks$)$

c$)$Determine the payback period of both projects. $(2$ Marks$)$

d$)$Which project would you choose? Why? $(3$ Marks$)$

$2)$ Games Inc. has developed a new electronic game and compiled the following product information.

Year Production Cost Promotion Cost Sales Revenue

$1$ $$48,000$ Nil Nil

$2$ $$48,000$ $$64,000$ $$64,000$

$3$ $$48,000$ $$96,000$ $$256,000$

$4$ $$48,000$ $$32,000$ $$128,000$

$5$ $$48,000$ Nil $$32,000$

If the company requires a return of $16\%$ on investments

a$)$Calculate the NPV of the project. $(8$ Marks$)$

b$)$Calculate the ROI of the project. $(2$ Marks$)$

c$)$Determine the payback period of the project.$(2$ Marks$)$

d$)$Which you go ahead with the project? Why$/$why not? $(3$ Marks$)$