(a) At the meeting, the operation director asks the production manager whether they can select both Proposals 2 and 3 together, rather than one proposal alone. The production manager replies that they can only adopt one among these four projects. What is the nature of these projects? Advise. (4 marks)(b) As the accountant, advise the operation director under what circumstances should the company go for the decision suggested by each manager. (6 marks)(c) Advise the operation director TWO differences in using the payback method against the net present value method for capital budgeting decisions. (10 marks)(d) COVID-19 pandemic lasts longer than expected, which accelerates the economic downturn.(i) As the management accountant, what is the nature of the fixed cost arising from automation? Explain and illustrate with examples. (4 marks)(ii) Comment on possible adverse effects on Fantastic using cost-volume-profit analysis if it continues to pursue the capital investment in automation to reduce direct labor cost in production. (9 marks)

Question 4 Fantastic Company (\"Fantastic\") has variable cost, sharing can of its revenue, and a low level of xed costs. Half of the variable costs are related to direct labor costs. Fantastic is considering four proposals for automation to lower its direct labor costs. After careful analysis, the company's accountant has the following analysis: Payback period Net present Internal rate of Accounting rate value [US-i] return of return The above financial analysis has been placed for discussion in a management meeting The executives debate among themselves on which proposal should be taken. a. Marketing manager: Iprefer Proposal 1 as it has the shortest payback period. b. Production manager: I prefer Proposal 2 as it has the highest intemal rate of return c. Design manager: I prefer Proposal 4 as it has the highest net present value