Question: A firm is considering two projects with the following cash flows. The required return for both projects is 20 percent. Year Project H Year

A firm is considering two projects with the following cash flows. The required return for both projects is 20 percent. Year Project H Year Project I -$750,000 0 -$375,000 1 400,000 1 250,000 23 2 450,000 3 350,000 23 175,000 105,000 Required: a. Calculate the NPV & IRR for both projects. b. Calculate the payback periods (including the fraction of a year) for both projects. (3 marks) c. Calculate the profitability index of both projects. d. Based on the above calculations, which project or projects should the firm choose if the projects are: i. Independent. Explain ii. Mutually exclusive. Explain

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