Hi,

Can you please help me with the following questions

Question 3 You are provided with the following information regarding two potential investment opportunities: Investment X Investment Y Initial cost: $1,200,000 Initial cost: 21,100,000 Cash flow Year 1: 2400,000 Cash flow Year 1: 8900,000 Cash flow Year 2: 2500,000 Cash flow Year 2: 2400,000 Cash flow Year 3: 2500,000 Cash flow Year 3: 2500,000 Cash flow Year 4: 2600,000 Cash flow Year 4: $600,000 Cash flow Year 5: 2600,000 Total cash flows: $1,300,000 Total cash flows: $1,400,000 The business can only invest in one of the opportunities, and the required rate of return is 8%. 3.1 Which one of the two opportunities appear more lucrative, only looking at the cash flows over the lifetime of the investments? Start writing here: 3.2 Now, evaluate the two investment opportunities, using the net present value technique. Make use of the following extract from a discount table in your calculations. 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 Complete the following template to answer this question: Investment X Discount factor Net present value\"A\" _ Investment Y Discount factor Net present value 3.3 Based on the calculations performed in 3.2, which one of the two investments should the business pursue? Justify your answer. Start writing here: Question 4 Assume that the net present value for an investment is calculated as -14,000, at a rate of return of 8%. What does this imply about the internal rate of return? Start writing here