QUESTION ONE: (9 MARKS) Sportsman ple is a manufacturer of sports equipment. The firm is considering whether to invest in one of two automated processes, the Lampard or the Gerrard, both of which give rise to staffing and other cost savings over the existing process. The relevant data relating to each are given below: Investment outlay (payable immediately) Year 1 Annual cost savings Y2 Annual cost savings Y3 Annual cost savings Y4 Annual cost savings The required return is 14 per cent p.a Lampard ($) (40,000) 16,000 16,000 16,000 12,000 Gerrard ($) (50,000) 17,000 17,000 17,000 17,000 The depreciation policy is to depreciate assets over their useful lives on a straight-line basis. Required: By using ARR, which project should the company invest in either of the two above? Why?