$(3)$ ST$10-1$ All techniques with NPV profile: Mutually exclusive projects Fitch Industries is in

the process of choosing the better of two equal$-$risk, mutually exclusive capital ex$-$

penditure projects, $M$ and $N.$ The relevant cash flows for each project are shown in

the following table. The firm's cost of capital is $14\%.$

IRF

a$.$ Calculate each project's payback period.

b$.$ Calculate the net present ualue $($NPV$)$ for each project.

c$.$ Calculate the internal rate of return $($IRR$)$ for each project.

d$.$ Summarize the preferences dictated by each measure you calculated, and indicate

which project you would recommend. Explain why.

c$.$ Draw the net present value profiles for these projects on the same set of axes, and

explain the circumstances under which a coaflict in rankings might exist.