All techniques with NP profile: Mutually exclusive projects Projects A and B are alternatives for expanding Rosa Company's capacity. The firm's cost of capital is $13\%.$ The cash flows for each project are shown in the following table.

Project A

$-$ $$80,000$Cash inflows $($CF$+)$ Project B

Initial investment $($CFo$)-$ $$50,000$

Year $($t$)$

$1$ $$15,000$ $$15,000$

$220,00015,000$

$325,00015,000$

$430,00015,000$

$535,00015,000$

$*$ Calculate each project's payback period.

$*$ Calculate the net present value $($NPV$)$ for each project.

$*$ Calculate the internal rate of return $($IRR$)$ for each project.

$*$ Draw the NPV profiles for both projects on the same set of axes, and discuss any conflict in ranking that may exist between NPV and IRR.

$*$ Summarize the preferences dictated by each measure, and indicate which project you would recommend. Explain why.