100 marks) Question 4 (20 marks) (a) A company has to make a choice between two projects, because the available financial and human resources 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 achievable after implementation of the project. The second project is the development of a new product which would produce the following net profits after implementation: Year 1: $15 000 Year 2: $125 000 Year 3: $220 000 Looking at the present values of the two projects in the first 3 years, which project should the company implement first? Assume a discount rate of 5% per year. 10 [10 marks]