Project A55 B66 C77 D88 Investment Annual Earnings $ 1,500,000 $ 310,000 $ 2,200,000 $ 280,000 $ 3,500,000 $ 390,000 $ 700,000 $ 174,000 REQUIRED A) Chad is currently evaluated based on his Return on investment (ROI). (2 marks) 1) If the required rate of return is 17%, which projects would be accepted? ) if they can only choose one project, which would they choose? B) Cosmo Inc. has decided to change its investment stategy to focus on Residual income analysis. Which project should Chad choose under these new requirements if the company requires a minimum required return of 11%? (2 marks) C) Donny, a manager in another investment centre, has presented Chad with a new 6 year project opportunity to replace one of the factory machines. The details of this investment are below: Cost of new machine $ 160,000 Useful life of the new machine 6 years Salvage value of the old machine $ 12,000 Salvage value of new machine $ 22,000 Additional information: The new machine has an automation feature that will eliminate the need of one factory worker, saving $40,000 per year in salary. Annual repairs would be required for the machine at a cost of $3,000 per year. The old machine did not require any maintenance costs. Cosmo Inc. has a cost of capital for new projects of 12%. Calculate the Net Present Value of this project. Should this new project be pursued? (6 marks)