Company ABC is a producer. Its CFO will choose one project from two proposals. Project A lasts for 4 years and its initial investment is 5 million. In contrast, Project B lasts only for 2 years and its initial investment is 2 million. All equipment will be depreciated in a straight line down to zero. The cost of capital is 15%. The tax rate is 20%. The cash flows of these two projects are illustrated in the following table. - Million + % Year- 1- 20 3. Ao As 3 3. 2 les B- 2.5+ le o ' REQUIRED: 1.Assume each project can only be carried out once. If the CFO mainly cares about the equivalent annual benefit of a project, which project should be chosen? 2.Assume Project B can be repeated in the end of the second year and the CFO is considering a plan for next four years. Based on the NPV rule, which project should be chosen? 3.latest information indicates that the equipment in Project B can actually be sold at 0.5 million in the end of its usage (rather than zero as initially assumed). The salvage value of Project A remains zero. Based on the new information, please re-consider the project selection using the NPV rule as in Step 2