3. You have an investment fund of 8 million. You have a project whose planning horizon is 10 years. There are several options available which will be analyzed using the portfolio technique (as used in homework problem 6-65 and 6-66). A certificate of deposit (CD) is available at 10% per year for 10 years. Any early withdrawal results in a large penalty. A passbook saving is available which can be added to (or withdrawn from) at any time. It pays 6 % per year. A CD only option is one possible choice Two project options are available: (A) Initial Cost 4 million. Revenue starts at 400,000 at year one and increases each year by 100,000. Salvage value at 10 years is 500,000. (B) Initial Cost 6 million. Revenue is uniform at 800,000 per year. Salvage Value at 20 years would be zero, where the Salvage Value at t-O is Initial Cost and it decreases linearly to zero over the 20 years.(You will have to calculate Salvage Value at 10 years) Any unused funds at t O is placed in the Certificate of Deposit. Any funds generated each year is placed in the passbook account. Again, the planning horizon for this analysis is 10 years. Analyze the situation quantitatively (as in the homework)