Answer the following questions: The Project Company are deciding whether to invest in a project. They have two mutually exclusive alternatives and require help to calculate the best option. Project A B Investment required Working capital Cash inflows Cash savings Running costs 225,000 22,500 93,000 9,500 34,200 87,000 6,500 75,000 8,500 42,000 Project duration 5 years 3 years Working capital will be returned at the end of the project. The machine in project A will have a disposal value of 7,500 at the end of the project The Cost of capital is 10% 3 Required: 1. Using the information provided, calculate the Net Present Value (NPV) and the Payback Period for each project. 2. Recommend the best project and justify your decision. 3. Explain which investment technique you would recommend and why. Your answer should clearly state whether you recommend use of NPV, or payback, or both methodologies, or alternative methods you feel are more appropriate. 4. Without performing calculations, explain the role and purpose of the Internal Rate of Return