Question One (55 Marks) Barry Cabs is a sole proprietorship that owns and operates one taxicab. The company purchasedits cab 5 years ago for K40,000. When it purchased the cab, it expected it to be useful for 8 years with a residual value of K5,000. Barry thinks he could sell the cab today for K14,000. Barry is considering replacing the old cab with a new, all-electric taxi. The all-electric car would cost K60,000 and would have an expected useful life of 8 years. Over its 8-year life, the cab would reduce annual operating costs (mostly gas and maintenance) by K8,000 per year for the first 6 years, and K10,000 per year thereafter. After 8 years, it is expected the taxi would have a K2,000 residual value. Barry's cost of borrowing is 15%. Required: a.) Calculate the project's cash payback period. b.) Calculate the project's net present value. c.) Calculate the internal rate of return of the project. d) State two advantages and disadvantages of each method e) Distinguish between hard" and "soft" capital rationing, explaining why a company may deliberately choose to restrict its capital expenditure.