Question: Project Selection The board of Gritts Distillery is considering two mutually exclusive projects one tendered by Manufacturing Ltd. and the other tendered by Automation Lit. You have been asked to evaluate the projects and make a recommendation to the board. The project life-time for each project is 7 years. The initial investment for the first project Manufacturing Ltd, is 250,000, with maintenance and parts costing 20,000 per year for the duration of the project. The initial investment for Automation Ltd is 300,000, with an additional payment of 15,000 for parts and maintenance at the end of year 2 and at the end of year 4. The estimated details of the retums for the two projects are shown in Table 2. Evaluate the projects using the following methods. a) Payback Period 16 marks b) Return on Investment c) Net present Value (NPV) assuming an Internal rate of return of 10% and rate of inflation of 2%17 marks d) Which project you think the company should invest in. 8 marks