Can someone solve this soon please

1. ABC plc is considering starting two new projects. Projects 1 and 2 require investments of 2.5m and 3.2m, respectively. It is expected that both projects will generate revenue for the next 8 years; there will be no further income and costs. The revenues of both projects are 0.8m in the first year. Afterwards, the annual revenue will increase by 5% for Project 1 and 6% for Project 2. Variable costs will be 30% of revenues for both projects. Fixed costs are 120,000 per annum for Project 1 and 150,000 per annum for Project 2. The companys total annual depreciation is expected to be 500,000 for the next 8 years; Projects 1 and 2s annual depreciation amounts will be 20% and 25% of the total annual depreciation, respectively. The companys market value of assets is 100m and the market value of equity is 60m. The company pays 10% for debt and 14% for equity. Both projects have the same level of risks as the companys existing projects. The tax rate is 20%.

a. For both projects, calculate and tabulate relevant expected cash flows in each year.

b. Calculate the NPV of both projects by using appropriate weighted average cost of capital and make decisions (accept or reject) about the projects.

c. Suppose that ABC plc can invest only one project. Discuss capital rationing and explain which project should be selected under capital rationing. Critically discuss the Profitability Index method.

d. Discuss the uncertainties in project appraisal methods and methods used to handle these uncertainties.