INFORMATION The following information relates to two projects under consideration by Rothmans Limited: Project B Project A R1 555 000 Initial cost R1 550 000 7 years 7 years Expected life Expected scrap value Expected net cash flows: 0 0 R R End of year 1 450 000 420 000 2 420 000 420 000 3 400 000 420 000 4 200 000 420 000 5 180 000 420 000 6 350 000 420 000 7 450 000 420 000 The company estimates that its cost of capital is 13%. INFORMATION The following information relates to two projects under consideration by Rothmans Limited: Project B Project A R1 555 000 Initial cost R1 550 000 7 years 7 years Expected life Expected scrap value Expected net cash flows: 0 0 R R End of year 1 450 000 420 000 2 420 000 420 000 3 400 000 420 000 4 200 000 420 000 5 180 000 420 000 6 350 000 420 000 7 450 000 420 000 The company estimates that its cost of capital is 13%