Batelco Inc. is considering two mutually exclusive projects A and B. Each project requires an initial investment as presented in the below table. The economic life of the project A will be 5-Years and Project it will be 6 years, and both projects carry same risk Batelco Inc uses a discount rate of 12% After considering the current economic situation Batelco tnc. has set a maximum payback period of 4 years and minimum return on investment (ROI) 18% A financial analyst, prepared estimates of the annual reverses and costs associated with each project as in the below table Projects A Cost of equipment 240,000 Working Capital needed 60,000 Overhaul of the equipment in two years 12000 Annual revenues and costs: Sales revenues Projects B 470.000 80,000 14000 375,000 300,000 180,000 90,000 Variable expenses 48,000 78,333 Depreciation expense 70,000 Fixed out-of-pocket operating costs 90,000 6 years 5 year Life of Project X One or Project The working capital will be released 5th and 6th year of the project A and project B respectively, for investment elsewhere within the company. Required: 1. Calculate the net present value for each project. (4 Marks) 2. Calculate the simple rate of return for each product. (4 Marks) 3. Which of the two projects (if either) would you recommend that Batelco Inc. accept? Why? (2 Mark) Present value is given below to determine the appropriate discount factor(s) using the tables provided. Table Summary: Table of present value $1. Periods are listed in first column 1-15 riod 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14%6 15% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.842 0.826 0.812 0.797 0.783 0.769 0.75