opportunities presented to him by two student teams that have recently completed the MEM programme. Each of the business ideas centre around an innovative new product that will require substantial funding and time to develop and introduce to the market. For purposes of confidentially Mr Thedice has assigned code names to the two teams: Flint and Steel.

Both teams have developed extensive business plans, including cash flow projections. After several meetings, Mr Thedice was able to produce the following table of cash flows for the two opportunities:

$\backslash$table$[[,$Cash flows$],[,$Flint,Steel$],[$Year $0,-$R$600000,-$R$1450000],[$Year $1,-$R$500000,$R$0],[$Year $2,-$R$500000,$R$0],[$Year $3,$R$0,$R$0],[$Year $4,$R$0,$R$650000],[$Year $5,$R$800000,$R$975000],[$Year $6,$R$1000000,$R$1210000],[$Year $7,$R$1100000,$R$1450000],[$Year $8,$R$1200000,$R$1550000],[$Year $9,$R$1300000,],[$Year $10,$R$1350000,]]$

$2\mathrm{.}1$ Mr Thedice has to choose between the two opportunities as he has only limited capital available. He has indicated that he uses a WACC rate of $9,35\%.$ Based on NPV and IRR, what will you recommend? Explain your recommendation.

$2\mathrm{.}2$ Breakeven time is the time for a project or investment to reach positive cash flow. Determine the breakeven time for each opportunity. Does this help with the choice between Flint and Steel?