Q3 1) What are the techniques involved in comparing projects with unequal lives Explain the techniques in detail (5 marks) Q3 2) Promotion Ltd has to choose between two highway infrastructure projects They can submit a bid for only one of the two options The details of Project 1 and Project 2 are provided below Time Project 1 Cash flows (Millions) Project 2 Cash flows (Millions) 0 1500 2600 1 750 750 2 800 750 3 850 750 4 750 5 750 6 750 Considering specifically on the fact that the projects have unequal lives , which project will you choose (based on the relevant capital budgeting techniques) and why Please note that the discount rate is 8 Justify your answer (10 marks)

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Question: Q3. 1) What are the techniques involved in comparing projects with unequal lives? Explain the techniques in detail. (5 marks) Q3. 2) Promotion Ltd. has

Q3. 1) What are the techniques involved in comparing projects with unequal lives? Explain the techniques in detail. (5 marks)

Q3. 2) Promotion Ltd. has to choose between two highway infrastructure projects. They can submit a bid for only one of the two options. The details of Project 1 and Project 2 are provided below.

Time	Project 1 Cash flows (Millions)	Project 2 Cash flows (Millions)
0	-1500	-2600
1	750	750
2	800	750
3	850	750
4		750
5		750
6		750

Considering specifically on the fact that the projects have unequal lives, which project will you choose (based on the relevant capital budgeting techniques) and why? Please note that the discount rate is 8%. Justify your answer. (10 marks)

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