(i) ABC Company wants to evaluate two investment proposals. The first involves significant effort in new product development. The initial cost is $1 billion, and the company expects the project to generate relatively meagre cash flows in the first four years, followed by a big payoff in year 5 . The second investment is a significant marketing campaign to attract new customers. It too has an initial outlay of $1 billion, but it generates substantial cashflows almost immediately, and lower level of cash flows in the later years. As a financial analyst working for the ABC Company calculate each project's NPV if the required rate of return is 10%. Which project will you recommend to the management of the company? Why? (5 marks) (ii) An investment requires initial investment of 24,000 that will be depreciated using the straight line method over four years. The Cash flows from the project are: Year 1: 8,500 Year 2: 8,000 Year 3: 7,500 Year 4: 7,000 (a) What is the average contribution to net income across all four years? (2.5) (b) What is the average book value of the investment? (1.5)