1 + E Question 1190 marka Suppose Plurer and HioNTech have the following two mutually exclusive development plan for new laboratories and research centers, Project A and Project 1. The financial teams have prepared estimates of the initial investment, evaluation of the two possibilities produces the following cash flows and internal rates of retum (IRR), they are shown in the table below. The financial managers believe that the two plans early sinar risks and the acceptance of either of them will not change the roup's overall rak With the tight timeline, the group only accepts projects that can be paid back up to 25 years. Suppose the companies requires a retum of 1296 on the development plans, Year Project A (USS in thousand) (75000) 32,400 30.200 36,600 15.06% Project (USS in thousand) (38.000) 17.00 0 2 3 14,200 19,800 16.9296 IRR (D) Which project will you recommend by applying the internal rates of return (IRR) criterion? Why? (2 marks) (1) Apply tho Net Present Value (NPV) method to determine which project should be adopted. Explain (5 murks) (it) Apply the payback criterion to determine which project should be adopted: Explain. (3 marks) (iv) Apply the Profitability Index (PI) criterion to determine which project should be adopted. Explain. (3 mars) Based on your answers in parts through (in which project will you finally recommend? Explain. (marks) (vi). Suppose Pfizer has several positive nel present value projects that would like to pursue and thus decided to ide additional stures of common stock. As a result of this stock issue, the firm's stock price declined Explain why this occurred when the proceeds of the issue are being used to fund positive net present value projects (10 marks)