All techniques with NPV

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exclusive projectsProjects A and B, of equal risk, are alternatives for expanding Rosa Company's capacity. The firm's cost of capital is

14%.

The cash flows for each project are shown in the following table

	Project A		Project B
Initial investment (CF 0CF0)	$60 comma 00060,000		$30 comma 00030,000
Year (t)	Cash inflows (CF Subscript tCFt)
1	$10 comma 00010,000		$10 comma 00010,000
2	$15 comma 00015,000		$10 comma 00010,000
3	$20 comma 00020,000		$10 comma 00010,000
4	$25 comma 00025,000		$10 comma 00010,000
5	$30 comma 00030,000		$10 comma 00010,000

a.Calculate each project's payback

period. For projcet A and B two decimal places

b.Calculate the net present value (NPV) for each project. For projcets A and B nearest cent

c.Calculate the internal rate of return (IRR) for each project. For Project A and B two decimal places

d.Indicate which project you would recommend.

noth