Question 16 There are two competing proposals for the redevelopment of a piece of vacant land in Accra. One is to construct an ofce block on the site and the other is to construct a casino. You have been asked to give advice on which is the better investment. The company's weighted average cost of capital is 18%. The two projects generate the following cash ows Year Ofce Casino 0 -300 -300 1 -30 -400 2 90 50 3 180 100 4 215 800 a) Calculate the Net Present Value of each project using a discount rate of 6% and comment on your results b) Calculate the payback of period of each project and comment on your results c) Based on the internal rate of return criteria, explain the advice you would give to your client if the internal rate of returns for Ofce and Casino are 16% and 17.8% respectively d) What are the strengths and weaknesses of the NPV and the payback period investment decision criteria