(a)Two new financial plans are proposed to a young start-up company. Plan A will cost $250,000 to implement and is expected to have annual net cash flows of $75,000. Plan B will cost $150,000 to implement and should generate annual net cash flows of $52,000. The company is very concerned about their cash flow. The life of the proposed projects are 5 years.

1. (i)Use the payback period to determine which plan is better, from a cash flow standpoint? (3 marks)
2. (ii)If the required rate of return is 0.1, conduct a discounted cash flow calculation to determine which plan is better. (4 marks)
3. (iii)What are some advantages and disadvantages of the profit/profitability numeric models? (3 marks)

(b)A sales project at month 5 had an actual cost of $34,000, a planned cost of $42,000, and a value completed of $39,000.

1. (i)Find the cost, schedule variances and the cost-schedule index. (3 marks)
2. (ii)Comment on the project performance. (2 marks)

(c) Briefly discuss the main reasons to identify non-critical activities and the associated slack times.(6 marks)