A firm is planning to introduce a new product and has called for bids for the construction of the plant to manufacture the product. The cash flows predicted for the two bids under consideration are given below: Cash Flow Year Plant A Plant B 0 -90,000 -50,000 1 45,000 30,000 2 55,000 37,000 3 50,000 28,000 Using the net present value (NPV) approach, with an interest rate of 7% p.a., which plant should the company choose? (10 marks) Question 3 a) For a loan of $55,000, with an annual interest rate of 5% p.a. compounded monthly, and monthly repayments of $1,100. Find the number of payments required to repay the loan. How many years is this? (5 marks) b) CompuSystems was supposed to pay a manufacturer $19,000 on a date 4 months ago. CompuSystems is proposing to pay $10,000 today and the balance in 5 months, when it will receive payment on a major sale to the government. Assuming that the manufacturer requires 18% per year compounded monthly on overdue accounts. What should the second payment be? (10 marks)