The company where you work as Finance Director works on two different projects to

increase sales volume and efficiency. Your estimations and expectations regarding the

projects are as follows. After you have proven mathematically which project you choose

why? Pls explain your decision (10 points).

Project Alfa:

You estimate that the initial investment cost required for the new machinery will be

$2,300,000.

You predict that the useful life of the new machinery will be 6 years.

You expect the new machine assembly line investment to yield $ 550,000 net cash flow

at the end of each year.

You estimate that an annual 11% discount rate will be appropriate for this project.

Project Beta:

It is reported that the software used in production, finance, marketing and R&D

departments should be replaced with a higher package in order to increase the efficiency

of the software. You estimate that the initial investment value of this project will be

$800,000.

You predict that the useful life of the new software project will be 10 years.

You expect the new software investment to yield $110,000 net cash flow at the end of

each year.

You estimate that an annual 4% discount rate will be appropriate for this project.