_| |_ Question 4 write you answers commencing from page 11 A. Orionis Ltd is obligated to restore a leased land to its original condition after its oil drilling activities are over in four years. The cash ow for the restoration costs in four years are as follows: Cash ow re-uired $400,000 $120 000 $120 000 $50 000 The company's interest rate is 6%. [TASK] Determine the net present value of the restoration costs. [4 marks] B. Antares Ltd is considering two investment options. The rst option (Option A) involves an upgrade to an existing food-processing facility and the second option (Option B) is to build new food-processing facility. Antares can only undertake one of the two options and therefore, the management is evaluating which option it should choose. The cash ows for options A and B are as follows. _ 400,000 450,000 500,000 550,000 60,000 .487 500 175 000 175 000 225 000 225 000 250 000 ______ 612 500 575 000 500 000 450 000 40 000 -500 000 250 000 225 000 200 000 175 000 150 000 [TASK] Determine the payback period for both options A and B [4 marks]