Top Shelf Bakers Ltd. are considering two mutually exclusive investment projects with expected cash flows as given below: Year Project A Project B ($,000) ($,000) 0 -6,250 -7,000 1 2,250 3,750 2 2,000 3,500 3 1,750 3,250 4 1,500 5 1,250 Project A is an expansion of an existing product line and is considered to have the same level of risk as other projects at Top Shelf Bakers. Project B is an expansion into a new market and is considered much riskier than other projects at Top Shelf. Other companies operating in this new market have a typical β = 1.6 Top Shelf’s current required rate of return = 8.0% pa. The current market rate = Rm = 12.3% pa; The current risk-free rate is = Rf = 2.5% pa; Requirement: i) Which project, if any, should be selected, and why? 8 marks ii) If the projects were not mutually exclusive, what would be your recommendation, and why? 1 mark iii) Discuss the causes of conflict in project evaluation measures, and how you would determine the most appropriate measure to use when conflict occurs (approx. 250 words)