7. Given the following cash flows for projects A and B and assuming a cost of capital of 10% Year 0 1 2 3 Project A -100,000 25,000 30,000 35,000 80,000 Project B -150,000 50,000 60,000 70.000 50,000 a. Use the net present value method to select the better of the two projects. (9 pts) b. Use the payback period method to select the better of the two projects. (4 pts) c. Calculate the MIRR for the above two projects? (9 pts) 8. Given the following financial data for two firms in the computer industry Balance Sheet (in thousands) ABC Company $ 15 50 Cash A/R Inventory Plant/Equip. Total assets XYZ Company $ 10 90 117 240 457 150 270 57 S101 100 Current liab. Bonds payable Common stock Retained earnings Total 75 50 88 $270 70 186 S457 Income Statement (In thousands) $500 300 XYZ $700 475 7 Sales Cost of goods sold Interest expense Income before taxes Net Income Tax rate 105 80 32 40% 40% Other Selected Data Dividends per share $2.50 $2.50 Market Price year end $70 $80