Sugarpill Cosmetics is planning to diversify its operations by exploring two new business opportunities. Opportunity Skin Care has an expected working life of four years, requires 170000 of initial capital expenditure and a further 45000 of working capital. At the end of year 4 the residual value is forecast to be 30000. Opportunity Perfume also has an estimated working life of four years and has an initial cash outflow of 225000 which includes working capital of 30000. At the end of year 4 the residual value is estimated to be 40000. Estimates for net cash flow for both projects are as follows: Year 1 2 3 4 Skin Care 80,000 65,000 60,000 50,000 Perfume 75,000 70,000 70.000 65,000 Year Present Value Rates at 15%. Present Value Rates at 30% 1 0.8701 0.769 2 0.756 0.592 3 0.658 0.455 4 0.572 0.350 Required: - a) Utilising the above information, numerically assess the projects using: (i) Payback (10 marks) (ii) Net Present Value using the present value rates at 15% (10 marks) (ii) Internal rate of return using present value rates at 30% (15 marks) b) Based on your evaluation, make recommendations as to which project should be undertaken