3 [34] Girotech (Pty) Ltd is a supplier of 3D printed prosthetic devices to the healthcare industry. Owing to significant developments and advancements in both engineering and software technologies, the latest 3D printers available in the market have much more functionality, flexibility and advanced capabilities compared with existing printers. The new printers are also much more cost-efficient. Girotech's product design team intends to acquire additional 3D printers to expand the company's production capacity. The team investigated a range of 3D printers available and shortlisted three printers from which the team must select two owing to capital budget constraints. The team estimates the economic lifespan of the new printers to be three years, after which such printers will have no salvage value. The team collected the following information for purposes of assessing the viability of the investments and making a recommendation to Girotech's chief executive officer (CEO). The projected future cash flows include inflation. For simplicity, the team refers to the printers as DP1, DP2 and DP3. Projected cash flows from each of the printers: Year DP1 DP2 DP3 1 R450 000 R480 000 R500 000 2 R550 000 R600 000 R550 000 3 R640 000 R580 000 R620 000 The company requires a real return of 15%. The current inflation rate is 3%. The initial investment amounts for each of the printers are R2 000 000, R2 530 000 and R2 375 000, respectively. The capital budget available is R2.5 million. Required: Show all calculations and round off all answers to two decimals. 3.1. Apply the net present value (NPV) capital budgeting technique to determine the feasibility of each of the investments. The company requires that the nominal rate of return be used as the discount rate. (12) 3.2. Bearing in mind the capital budget limit, which two printers should the project team recommend? Use the NPV Index method for youtr analysis and provide relevant calculations and reasons for your answer. (22)