Black gold ltd is planning a new perminet project that requires a cost of 5,000,000 the firm plans a capital structure of 40% equity and 60% debt to finance their project the firm currently have net income of 3.500,000 to undertake this investment project two options are under consideration option a and option b the firm can currently have either a or b but can't have both each project option will last 5 years and have no salvage value at the end. The company required rate of return for all investment project is 8% the cash flows of option are provided below.

option A cost 178000 cash flows y1 40,000 y2 52,000 y3 55,000 y4 57,000 y5 43,500

option b cost 187000 cash flows y1 47,000 y2 64,000 y3 52,000 y4 54,000 y5, 36,000

A) determine the divided amt if any can be paid out to shareholders by applying residual theory?

b) calculate dividend payout ratio?

c) identify which project should company accept based on pay back period if the baseline for payback is max 3.5 years?

d) identify which project should the company NPV (net present value) method round up the result to 6 digits?

e) if considering both method which option the company should choose? and why?