25 marks Maxim Inc. is considering two mutually exclusive projects. Project 1 requires an investment of R40 000, while Project 2 requires an investment of R30 000. Cash revenues and cash costs for each project are shown below PROJECT 1 YEAR 2 4 Revenues Variable costs Fixed costs R13 000 7 000 1 000 R18 000 9 000 2 000 R35 000 12 000 3 000 R25 000 12 000 1 000 PROJECT 2 YEAR Revenues Variable costs Fixed costs R22 000 12 000 4 000 R38 000 21 000 3 000 R16 000 8 000 2 000 4 R9 000 5 000 1 000 The company estimates that at the end of the fourth year, Project 1 will have a salvage value of R3000 and Project 2 will have a salvage value of R1000. Required: Determine the net present value of EACH project using a 16% discount rate. b. Prepare a memorandum for management stating your recommendation. Include supporting calculations in good form