2 The UMCCED Technology is considering two genetic research projects. The required rate of return on these projects is 11%. The two projects provide the following set of after-tax net cash flows. Project AKU Project ENGKAU Initial outlay -RM50,000 -RM50,000 Inflow year 1 RM10,000 RM16,000 Inflow year 2 RM18,000 RM16,000 Inflow year 3 RM15,000 RM16,000 Inflow year 4 RM16,000 RM16,000 Inflow year 5 RM13,000 RM16,000 Required: a. Determine the payback period for each project. If the institute imposes a 3.5-year maximum acceptable payback period, which of these projects should be accepted? b. Calculate the net present value (NPV) for each project. c. Calculate profitability index (PI) for each project. d. Calculate the internal rate of return (IRR) for project ENGKAU. (3 marks) (3 marks) (2 marks) (2 marks) e. Based on the IRR given and your answers in part (b) and (c) above, explain briefly which project should be accepted, (i) If they are independent? (ii) If they are mutually exclusive? (1 mark) (1 mark)