QUESTION 4 (25 MARKS) ner of Lily Pancake House is considering an expansion of the business. He has identified the following two alternatives as follows: Build a new restaurant near the mall. Buy and renovate an old building downtown for the new restaurant The projected cash flows from these two alternatives are shown below. The owner of the restaurant uses a 10% after tax discount rate. Net After-Tax Cash Inflows* Years 1-10 RM50,000 RM35,800 Investment Proposal Mall Restaurant Downtown Restaurant Years 11-20 RM50,000 Cash Outflow:Initial Outlay RM400,000 RM200,000 includes after-tax cash flows from all sources, including incremental revenue, incremental expenses, and depreciation tax shield. Required: a) Compute the net present value of each alternative restaurant site. (10 marks) Compute the profitability index for each alternative. b) (6 marks) c) Rank the two sites rank in terms of (a) NPV and (b) the profitability index (4 marks) Comment on the difficulty of ranking the owner's two options for the new restaurant site