A firm is evaluating two mutually exclusive projects that have unequal lives. The firm must evaluate the projects using the annualized net present value approach and recommend which project they should select. The firm's cost of capital has been determined to be 12 percent, and the projects have the following initial investments and cash flows: Project A Project B Initial Investment 35,000 42,000 1 1 25,000 12,000 2 19,000 13,000 3 14,000 4 15,000 1. Find the annualized NPV for project A and B (15%) 2. Based on the answers above, which project the firm should choose? Answer the following questions based on the information provided in the table Plan 1 Plan 2 Interest Expense 30,000 55000 Preferred dividends 2,000 4,000 Common shares outstanding 150,000 150,000 a. What is the degree of financial leverage at a base level EBIT of $120,000 for both financing plans? The firm has a 40 percent tax rate. b. What is the EPS for both Financing Plan 1 and Plan 2, if the firm projects EBIT of $250,000 and has a tax rate of 40 percent