1 Your firm is considering two projects that are mutually exclusive. The forecast yearly cash flows are shown below.

TimeProject AProject B0-200,000-200,0001-40,000100,000280,00075,0003100,00040,0004120,00020,000

a) Calculate the payback period (undiscounted) of each project. Include fractional periods (e.g., x.xx years) in your response, if applicable.

b) Calculate the IRR of each project. Provide your answer rounded to two decimal places (e.g., X.XX%)

c) Calculate the Modified IRR (MIRR) of each project using an 8% discount rate. Provide your answer rounded to two decimal places (e.g., X.XX%)

d) Calculate the NPV of each project at discount rates of 0%, 5%, 10%, and 15%).

e) Calculate the incremental IRR (i.e., the cross-over rate) and construct an NPV profile graphto illustrate how thechoicebetweentheprojectsdepends onthediscountrate.Indicatewhenyoushould accepteachproject, making surethatyouareexplicitabouttheconclusionstobedrawnfromtheNPVprofile andprovidespecific numbers.(Do X if ; do Y if ; do Z if)