2. The government of Jamaica (GOJ) is faced with a choice between 5 projects, all of which have real value start-up costs at the beginning of the first year of $150m, $85m, $280m, $320m, $94m respectively, and closing costs of $45m each in year 6 in real values. The forecasted net returns that are expected to be generated at the end of each year, over the life of these projects are outlined in the table below: Project Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 OBST Q $9m $30m $40m $125m R -$5m $205m $75m $10m $40m $18m $320m $50m - $10m $15m $25m $152m $30m $40m $50m $100m U $174m $10m $12m $9m $14m Note: The returns for Projects Q, R, T, and U are expressed as being the real returns. For Project S, the returns are expressed in nominal terms. Additionally, inflation over the 6-year period averaged 6.9%. Page 1 of 2 (a) Draw a cash flow timeline forecasting the real returns for each of these projects. (b) Using the net present value (NPV) approach, show whether these projects are viable at the going discount rates of: i. 9.38%; and ii. 11.22% (c) Using your results in part (a)i and (a)ii, show which project is preferred at the 9.38% and 11.22% discount rates respectively; and offer an intuitive explanation for your preferences at different interest rates.