Question B1 (17 marks) (a) (6 marks) Green Life Corporation is trying to choose between two mutually exclusive projects. Project A has a 5-year expected life, an initial cost of $60,000 and a profitability index (PI) of 1.2. Project B has a 7-year expected life, an initial cost of $74,000 and a profitability index (PI) of 1.24. Both projects have conventional cash flows, can be repeated and that there are no anticipated changes in the cash flows. Green Life Corporation required a return of 19% for both investments. What is the company's investment decision? (b) Owl Printing House is considering purchasing a new digital printing press machine to replace the existing printing press machine. The current printing press machine has a remaining life of 6 years and a depreciation of $60,000 per year (the depreciation of the current printing machine will last for another 6 years). The after tax market value of the existing printing press machine now is $360,000. The new digital printing press machine cost $600,000 and has an expected life of 6 years. This $600,000 will be 100 percent depreciated straight line over 6 years. The new digital printing press machine is expected to perform more efficiently and produce a before tax cost saving of $70,000 a year. The company's cost of capital is 14 percent and has a tax rate of 32 percent. i) Should the company replace the existing printing press machine? (6 marks) ii) Explain your result in (i)