C2. a) Jinx Co has 3,500,000 available for capital investment. It is considering four divisible projects, the data for which is as follows:- Project Investment required Net present value of future cash flows A B (500,000) (1,000,000) (2,500,000) (3,000,000) 750,000 1,100,000 3,500,000 3,050,000 D I Required: Showing full calculations, set out the investment plan that you would recommend to the Board of Directors of Jinx Limited. You must indicate the value that will be added to the company as a result of your plan. 13 marks b) You are given the following information in respect of another project (Project E): Investment data The initial investment in labour-saving equipment will be 250,000. The resale value of the equipment in five years' time is expected to be 20,000. Working capital investment will be 7,500 immediately. This working capital will be sold at its full value at the end of the project. The company's cost of capital is estimated at 8%. Operating data Annual cost savings resulting from the project, if it is undertaken, are expected to be as follows:- Year 1 2 3 E 50,000 100,000 100,000 80,000 75,000 5 Other information Annual fixed costs that will accrue if the investment is made are expected to be 30,000 The company has spent 5,000 on a feasibility study. Required: Calculate the Net Present Value for Project E and make a recommendation as to whether or not it should be accepted. 15 marks