QUESTION 1 OPTION 1 5000000.30.975500000.7 -37500 1.01 1.0) 144802+3430437500 I106 OPTION 2 6000000.5×0.96000000.5 NPV 45000 l.01 1.0) 2672729408945000 =$ll16 Conclusion: Adopt Option 1(2.5/30, n/60)as it has the higher NPVAugust 2003 QUESTION 1 (a) OPTION 1 ( ) = $112906 =144802+ 343104- 375000 - 375000 1 .0 1 500000 0 .7 + 1.0 1 500000 0 .3 0 .9 7 5 NPV = 2    OPTION 2 ( ) = $111416 = 267327+ 294089- 450000 - 450000 1 .0 1 600000 0 .5 + 1.0 1 600000 0 .5 0 .9 NPV = 2    Conclusion: Adopt Option 1 (2.5/30, n/60) as it has the higher NPV