An investor has a choice between two projects (Project A and Project B).

Project A Project A requires the investment of $400,000 on 1 January 2020 and $200,000 on 1 April 2020. The project starts earning income from 1 July 2020. The income will be paid monthly in advance at an initial rate of $120,000 per annum. The income will decrease by $5,000 every year on 1 July and will cease at the end of 2030.

Project B Project B requires the investment of $600,000 on 1 January 2020. The project immediately starts earning income. The income will be received quarterly in arrears at an initial rate of $85,000. The income will increase at a compound rate of 4% per annum every four years with the first increase taking place on 1 January 2024 and will cease at the end of 2030.

(ii) Construct a quarterly cashflow schedule for Project B.