Project in Managerial Accounting for Managers - ACCT-612 The board of directors of Gulf Company is in the process of making decisions related to the following two issues, and in your capacity as the company's management accountant, the Board assigned you to submit two reasoned reports in which you advise the Board to take the appropriate decisions: First Issue: There are two mutually exclusive investment projects. Both projects are concerned with the purchase of new plant. The following data are available for each project: Particulars Project 1 Cost (immediate outlay) 750,000 Project 2 300,000 Expected annual operating profit (loss): Year 1 270,000 100,000 Year 2 230,000 80,000 Year 3 250,000 95,000 Year 4 260,000 50,000 Year 5 202,000 100,000 Estimated residual value of the plant after 5 35,000 24,000 years If you know that the discount rate is 10 per cent. Neither project would increase the working capital of the business. The business has sufficient funds to meet all investment expenditure requirements. Required: The board of directors request you to prepare a report advising them to take appropriate investment decision. Therefore, in light of Long-term investments appraisal methods you studied, prepare a report in which you advise the company board of directors to prefer one of the mentioned two investment opportunities.