Question 4 (10 marks) The second capital budgeting decision which Armstrong and you were asked to analyse involves choosing between two mutually exclusive projects, S and L, whose cash flows are set forth below: Expected Net Cash Flow Year Project S Project L -$200,000 -$200,000 120,000 67,000 120,000 67,000 67.000 67,000 Both of these projects are in Archer's main line of business, premium table wine, and the investment which is chosen is expected to be repeated indefinitely into the future. Also, each project is of average risk, and hence each is assigned the 10% required rate of return. What is each project's single cycle NPV? Can you make a decision on this information? Why or why not? If not, what should you do to be able to make a decision? Which project should be chosen? Why?Question 4 (10 marks) The third decision to be considered involves a fleet of trucks with an engineering life of three years (that is, the trucks will be totally worn out after three years). However, if the trucks were taken out of service, of "abandoned" prior to the end of three years, they would have a positive salvage value. Here are the estimated net cash flows for each truck: Initial Investment and End-of-Year Net Year Operating Cash Flow Abandonment Cash Flow ($20,000) $20,000 $ 8.400 $12.400 WNEO $ 8,000 $8,000 $ 7,000 0 The relevant required rate of return is again 10%. What would the NPV be if the trucks were operated for the full three years? What if they were abandoned at the end of Year 2? What if they were abandoned at the end of Year 1? What is the economic life of the truck project