Question 1 Innovative Ltd. intends to raise funds at a cost of 5% per annum to either renovate its existing plant or construct a new plant. The two plans require different initial outlay but both will bring operating costs savings in the coming few years. Details are shown as follows: At the end of Net Cash Flow ($'000) Renovation to existing plant (250) New Plant (300) Year 0 - Initial outlay Costs savings: Year 1 120 100 Year 2 Year 3 Year 4 80 75 60 Year 5 75 40 Required: a) Advise with reason the plan to be invested in each of the following methods: 1) Payback period 11) Net Present Value (5 marks) (15 marks) (5 marks) b) State the commonality of the two methods and suggest with reasons that support using "net present value" method. (Total 25 marks)