(a)[2]
State two methods by which the directors might have forecast the future cash inflows.
(b(i))[6]
Calculate the net present value (NPV) for option 1.
(b(ii))[3]
Calculate the payback period, in years, for option 1.
(c(i))[6]
Calculate the net present value (NPV) for option 2.
(c(ii))[3]
Calculate the payback period, in years, for option 2.
(d)[5]
Advise the directors which option, if any, they should pick. Justify your answer.