Question 5 a) Myers & Brothers Pic has been offered a special-purpose metal-cutting machine for E1 10,000. The machine is expected to have a useful life of eight years with a terminal disposal value of E30,000. Savings in cash operating costs are expected to be - Word $25,000 per year. However, additional working capital is needed to keep the machine funning efficiently and without stoppage. This working capital is estimated to be Layout E8000. The company's cost of capital is 14%. 11 Required: A, The use of Net Present Value (NPV) and Internal Rate of Retum (IRR) Font unde dines the perspective of shareholder-value maximisation. Discuss this statement. 20 Marks Using both the net present value (NPV) and internal rate of return (IRR) criteria, determine the viability or otherwise of the project. Ignore taxation 30 Marks b) Renewable Energy Pic. is considering investing in either of two projects: Solar Park or Wind Farm. The setup of the solar park will cost E25 million and will generate E8 million per annum for 5 years. The wind farm will cost $35 million and generate $10 million for 10 years. Required: Determine the optimal project to invest in using (i) the annual net present value (equivalent annual annuity) method and (ii) the replacement chain (common life) method. The firm cost of capital is 10%. Ignore taxation, 50 Marks Total 100 Marks