Barne plc is a company based in the UK. It has its products available on the high street as well as selling online. You are trainee accountant and have been asked to examine the following information relating to two mutually exclusive capital budgeting decisions. Barne plc is considering production and sale of a new type of coffee machine. This will allow them to expand production over the next 7 years and support the drive to sell more of their successful range of products for domestic use. There are two investment options, C4 and C5, for coffee machine and information about the initial investment and four different capital investment appraisal measures are given in the table below. The cost of capital is estimated at 8%. The board of directors of Barne plc is about to attend a meeting to consider which option to choose. The IRR measure was added after the original board papers were released. When asked to estimate the IRR before calculating it, the company's Finance Director confidently stated that it would be "well over 8% for both options." 1.Critically discuss the usefulness of the FOUR capital investment appraisal measures in the table above. 2. Make a recommendation, with reasons, as to which option should be chosen. 3. Explain why the finance director was so confident that IRR would be well in excess of 8% for both options