(a) Better Times Limited has two mutually exclusive projects, A and B.

The company is considering which one is a better option if the shareholders require a return of 12%.

The cash flows from the two projects are provided in the table below

Using the following investment appraisal methods, advise the company on which project to choose

(i) Net Present Value (NPV),

(ii) Profitability Index (PI)

\begin{tabular}{|l|c|c|} \hline Year & Project A & Project B \\ \hline \multicolumn{0}{|c|}{c} & \\ \hline 1 & 100,000 & 100,000 \\ 2 & 30,000 & 49,000 \\ 3 & 50,000 & 49,000 \\ \hline \end{tabular}