Wonder Plc is considering two investment projects in another city and the estimated cash flows are as follows:

Year	HOTELS	HOUSING
	(m)	(m)
0 Capital outlay	(200)	(250)
Net cash flow
1	130	130
2	60	120
3	80	120
4	100	80
4 Residual value	20	40

The companys cost of capital is 15%.

Required:

(a) Assess the viability of these two projects using NPV and Payback period as the appraisal techniques and advise Wonder Plcs Board of Directors accordingly.