(b) Moulton Industries has two potential projects for the coming year, Project B-12 and Project F-4. The two projects are mutually exclusive. The cash flows are listed in the table below;

Cash flow Project B-12 Project F-4

Year 0 -4, 200, 000 -3, 870, 000

Year 1 2, 060, 000 0

Year 2 2, 060, 000 970, 000

Year 3 2, 060, 000 1, 440, 000

Year 4 0 2, 030, 000

Year 5 0 2, 510, 000

i. Given the above data, draw the NPV profile of each project

ii. Determine their cross over rate.

iii. If the appropriate bundle rate is 8% for both projects, which project does Moulton industries choose?