Part A

You are the Financial Manager of IwanaPass plc$.$ The company$$s long$-$term strategy relies on a strict set of ESG criteria and is currently considering two mutually exclusive and socially responsible investment opportunities. IwanaPass has projected the following cash flows. Both projects require an annual return of $9\%$ due to the risks involved.

Year Project A $()$ Project B $()$

$0-100,000-100,000$

$160,00050,000$

$240,00040,000$

$320,00030,000$

$410,00010,000$

a$)$ Calculate the Net Present Value $($NPV$)$ for each project. Based on the NPV investment appraisal method which project should the company choose?

b$)$ Calculate the Profitability Index $($PI$)$ for each project. Based on the PI investment appraisal method which project should the company choose?

c$)$ List the goals of the financial manager. What is the $$main goal$$ of the financial manager? Do you anticipate the existence of any conflicts between the $$main goal$$ and any Environmental, Social and Governance $($ESG$)$ principles the company might have? Discuss.

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