Big Construction Ltd is considering to invest in one of the following projects. Each option will

last $4$ years and have no salvage value at the end. The company's required rate of return for all

investment projects is $9\%.$ The cash flows of the projects are provided below.

Required:

Based on Net

the best machinery to invest.

Would the decision in question $($a$)$ change if company decides to use simple payback

period as their preferable capital budgeting technique and if company maintains a policy

that every investment project should recover initial investment within $2$ years?

iii. Critically review and recommend the best capital budgeting technique out of the above two

methods. Your answer should link with the information given in the case study and your

calculation