A corporation is considering two mutually exclusive projects. Both projects require the same investment, but have different patterns of cash-inflow. The cash-flows are shown below for years 1 to 7. All cash-flows are in thousands of dollars. The corporation applies a 10% discount rate.

1. Rank the projects by Payback Period, Discounted Payback Period, NPV, Profitability Index and IRR.

2. At what discount rate will Project 1 and Project 2 have the same NPV?

\begin{tabular}{|ccc|} \hline Project Number & 1 & 2 \\ Initial Investment & 2,000 & 2,000 \\ Time & & \\ 1 & 1200 & 350 \\ 2 & 900 & 60 \\ 3 & 300 & 60 \\ 4 & 90 & 350 \\ 5 & 70 & 700 \\ 6 & & 1200 \\ 7 & & 2250 \\ \hline \end{tabular}