A company is considering a capital investment proposal where two alternatives involvi differing degrees of mechanisation, are being considered. Both investments would have a fiv year life. In Option 1 new machinery would cost 278,000, and in Option 2805,00 Anticipated scrap values after 5 years are 28,000 and 150,000 respectively. Depreciation provided on a straight line basis. Option I would generate annual cash inflows of 100,000, a Option 2, 250,000. The cost of capital is 15%. Required: (a) Calculate for each option (i) the payback period (ii) the accounting rate of return, based on average book value (iii) the net present value