A firm is considering two projects with the following cash flows. The required return for project $O$ is $10\%.$ Project $M$ however is riskier and has a required return of $15\%$

Required:

a$.$ Calculate the NPV & IRR for both projects. $(8$ marks$)$

b$.$ Calculate the payback period $($including the fraction of a year$)$ for both projects. $(3$ marks$)$

c$.$ Calculate the profitability index of both projects. $(3$ marks$)$

d$.$ Using the in above calculations, which project or projects should the firm choose if the projects are:

i$.$ Independent. Explain $(3$ marks$)$

ii$.$ Mutually exclusive. Explain $(3$ marks$)$