A company is considering two mutually exclusive projects. Initial investment for Project A (IRR=32%) is 15,000 and for B (IRR=28%) 18,000. For both projects, life time of the projects is 5 years, required rate of return for both the projects is 10%. The net cash flows before the tax and depreciation are as given in the table below. For both projects tax of 40% on cash inflows is to be charged.

Year	1	2	3	4	5
Project A	7000	9000	7000	6000	7000
Project B	5000	4000	12000	13000	12000

Calculate the NPV and Profitability index for each project. Which project would be selected and why?