Question: 2. The Shen Corporation is considering two mutually exclusive projects. The free cash flows associated with those projects are as follows: Project A Project B

2. The Shen Corporation is considering two mutually exclusive projects. The free cash flows associated with those projects are as follows: Project A Project B Initial outlay -$50,000 -$50,000 Inflow year 1 15,625 0 Inflow year 2 15,625 0 Inflow year 3 15,625 0 Inflow year 4 15,625 0 Inflow year 5 15,625 100,000 The required rate of return on these projects is 10 percent. a. What is each project's payback period? b. What is each project's NPV ? c. What is each project's IRR ? d. Calculate the profitability index for each project, using a cost of capital of 10 percent. Which project would you choose to pursue

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