A company is considering two mutually exclusive projects, each with an initial investment of $150,000. The company has set a 4 year maximum payback period, while its cost of capital is 9%. The cash flows are shown in the below table.

Cash Inflows

Year

Project A

Project B

1

$45,000

$75,000

2

$45,000

$60,000

3

$45,000

$30,000

4

$45,000

$30,000

5

$45,000

$30,000

6

$45,000

$30,000

a.Calculate payback period for each project

b.Calculate the NPV for each project at 0%

c.Calculate the NPV for each project at 9%

d.Derive the IRR of each project

e.Rank the projects by each of the techniques used. Make and justify a recommendation.