1. A company has to make a choice between two projects, because the available resources in money and kind are not sufficient to run both at the same time. Each project would take 9 months and would cost $250,000. The first project is a process optimization which would result in a cost reduction of $120,000 per year. This benefit would be achieved immediately after the end of the project. The second project would be the development of a new product which could produce the following net profits after the end of the project: 1. year: 2. year: 3. year: $ 15,000 125,000 $ 220,000 $ Assume a discount rate of 5% per year. Looking at the present values of the benefits of these projects in the first 3 years: a) Calculate the net present value (NPV) for both projects. b) Evaluate which project is more attractive in terms of monetary. (6 marks) (2 marks) (CLO1: PLO1: C5)