SECTION B-ANSWER ANY TWO QUESTIONS FROM THIS SECTION Question 2: Consider the following projects and assume an opportunity cost of capital of 12%. Cash Flows Project Co C7 C2 A -20,000 45,000 15,000 -10,000 15,000 30,000 -10,000 15,000 25,000 B c a. Calculate the Net Present Value (NPV) of each project. Which is to be preferred and why? (8 marks) b. If there is a capital constraint in place which limits spending to 10,000, which project or projects should be selected? Support your answer with calculations. (5 marks) c. Explain how the following should be treated in a net present value calculation of a project: 1. sunk costs 2. depreciation 3. non-incremental costs (such as allocated head office costs)