You have been tasked with analysing two potential investments for Superman Ltd. The details are provided below. Note only investment projects with a positive NPV are accepted. You are to use the cost of capital that has been calculated for organisation 5% plus a risk premium for the projects of 1.5% for your NPV analysis.

Prepare a board report with the analysis of the investment proposals. You must include your recommendation for one of the investments only and the basis for your recommendation.

Investment A a. A potential investment in a non-listed company, the expected purchase price is $30m assume this to be settled and paid in 2020. Cash flows over five years have been provided and are as follows (figures are in 000's) 2020 2021 2022 2023 2024 $4,000 6,000 $7,000 $8,000 $9,000 Investment B b. A potential investment in a new product, the expected investment for the development of the production 2020 is $20m. Net Cash flows over five years have been projected and are as follows (figures are in 000's) 2020 2021 2022 2023 2024 $3,500 $4,000 $4,500 $6,000 $8,000