Long$-$term investment decision, payback method Al Ain Limited$$s business partner,

Mohammed Saif, has proposed that they invest in a coffee shop. This investment costs

AED $90,000$ today and promises to pay AED $12,000,$ AED $14,000,$ AED $16,000,$ AED

$18,000,$ and AED $38,000$ over the next five years. Alternatively, Omar suggests they

can invest AED $90,000$ in a restaurant, which promises to pay AED $15,000,$ AED $15,000,$

AED $15,000,$ AED $35,000,$ and AED $38,000$ over the next five years.

a$.$ How long will it take for Mohammed Saif and Omar to recoup their initial

investment in the coffee shop? Which project should Mohammed Saif and

Omar choose?

b$.$ If the required rate of return is $12\%,$ which project Mohammed Saif and Omar

to choose using the Net Present Value method?