You MUST use tables to in 2nd and 3rd pictures. otherwise do not bother answering this question. Thanks

Class Question (7) - (NPV/IRR/PP) An engineering company in the south-east of the country is currently considering investing in new plant in order to enable expansion of its limited product range. The business has incurred expenditure of E34,000 over the past three years researching and developing new products. Following this research, the company has identified two possible options for investment and these have been put forward for appraisal. The following data is available for eaci Along with the initial cost of the new plant the business would have to invest a further 45,000 in working capital in either project which can be recouped at the end of the project. Both projects would incur marketing costs of 616,000 per annum. The business has an estimated cost of capital of 10% and uses the straight-line method of depreciation for all non-current (fixed) assets when calculating net profit. The business has sufficient funds to meet all capital expenditure requirements. Ignore taxation. Assume it is now November 30th Year 0. (a) Calculate for each project: (i) The net present value. (ii) The approximate internal rate of return. (iii) The payback period. (b) State which, if any, of the two projects the directors of the engineering company shoulc accept and the reasons why. (c) State, in general terms, which method of investment appraisal you consider to be mos appropriate for evaluating investment projects, and why. Solution: (a) P.T.O. (b) NDV (Project A) NPV (Prolect B) IRR (Prolect B) IRR = PP (P) PP (Prolect B)