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SmartArt Styles Benny Design Idees Profitability Index BANGOR IMITI A company is choosing between two alternative investment projects relating to the manufacture of a new product. Project A involves an initial outlay on machinery of £2.2 million; • project B involves an initial outlay on machinery of £2.6 million • The machinery used in Project A is not anticipated to have any scrap value at the end of the project's life. The machinery used in Project B is anticipated to have a disposal value of £300,000 at the end of the project's life. The company uses a cost of capital of 15% in project evaluation The other net cash inflows associated with each project are: Year Project A Project B Calculate the {m 1. payback period 0.3 2. NPV 3. IRR 4. PI 1 2 1 1 0.8 0.2 0.5 3 4 5 0.9 1,2 1.2