Question 2 NLU plc is planning to launch a new product in the near future. The research and development team have developed two new products, the Tron' and the 'DJ.NLU can only launch one of the products; therefore, the projects are mutually exclusive. NLU has a cost of capital of 8%. The Tron The Tron is expected to have a lifecycle of 6 years. The estimated cash flows are provided below: Year 0 2 Cash flow (Sm) 25 +2.5 +2.5 +25 +2.52.5 3 4 5 6 lo a) Calculate the NPV of the Tron project. (2 marks) b) Calculate the IRR of the Tron project. (2 marks) The DJ The DJ is expected to have a lifecycle of 6 years. The IRR of the project has already been correctly calculated as 11.53%. The estimated cash flows are provided below: Year Cash flow (Sm -10.5 +3.5 4 2 0 3 +2 5 +7 6 +7 c) Calculate the NPV of the DJ project. (2 marks) d) Given the information provided above and your answers to parts a), b) and c). discuss the use of NPV and IRR for determining which of the projects should be undertaken (4 marks) Total 10 marks