1. Compute the (a) net present value, (b) internal rate of return (IRR), and (c) discounted payback period (DPB) for each of the following projects. The firms required rate of return is 14 percent.

Year	Project Alpha	Project Beta
0	$(270,000)	$(300,000)
1	120,000	0
2	120,000	(80,000)
3	120,000	555,000

Which project(s) should be purchased if they are independent? Which project(s) should be purchased if they are mutually exclusive?

2. The CFO of Horatios Hotels gave three college interns three different independent projects to evaluate. Following are the results of their analyses:

The CFO agrees with the final accept/reject decision that each intern made. But she spotted an error in the numbers reported by one of the interns. (a) Which interns report has the error? (b) Does the information given here provide an indication of the firms required rate of return? Explain your answers.