Question 5 (6 marks) The Redgum Company Ltd has two independent projects it could invest in. The financial operations manager has completed some analysis and has presented the information to the board. The board has asked you for advice. The entity uses a Payback period criterion of not accepting any project that takes more than 8 years to recover costs and an Accounting Rate of Return not less than 5%. Project A Project B Investment required ($'000) 550 1,550 Life of project (years) 13 15 Accounting Rate of Return 3.25% 9.25% Payback period (years) 10 Net Present Value ($'000) 22 47 4 Required a) Are both projects acceptable to the entity? Explain why. (Hint: ensure you review each method and give consideration to the investment required and the life of the project.) (3 marks) b) If the entity had a history of conservatism in its financial decision making, which project would you advise them to invest their money into, project A or project B? Ensure you justify your selection