Task 2.3 - Capital Budgeting Great Comfort Inc. are producing high end furniture in the USA and are looking to expand their operations. They have analyzed their opportunities and are currently considering two potential ways of expanding either in South America or in China. They are only able to choose one of the two markets. If they choose to expand in South America, they expect to have to invest USD300 million in a plant, which they expect would yield a yearly return of USD45 million for the next 15 years. If they instead choose to expand in China, they expect they would have to invest USD370 million, which would return USD25 million yearly for the first 4 years, followed by a yearly return USD60 million for the following 5 years and finally a yearly return of USD90 million for the last 6 years. Assume that the investment is made in year 0 and payments are made at the end of periods with first payment end of year 1 . Answer the following: 1. Visualize the stream of cash flows for each investment opportunity. 2. Great Comfort Inc. demands a payback period of maximum 9 years. Calculate the payback period for both investment opportunities. Do they live up to the requirement? According to this, which is the preferred option? 3. Great Comfort Inc. has a discount rate of 7\%. Calculate the Net Present Value (NPV) of both investments and state which is the preferred option in this case. 4. Calculate the Internal Rate of Return (IRR) for both opportunities and comment on what this tells us about the options. 5. What are some disadvantages of the Payback Method? Show your calculations