All techniques with NPV profileMutually exclusive projectsProjects A and B, of equal risk, are alternatives for expanding Rosa Company's capacity. The firm's cost of capital is 14%.

a.Calculate each project's payback period.

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

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

d.Indicate which project you would recommend.

a.The payback period of project A is ________years.(Round to two decimal places.)

The payback period of project B is ______ years.(Round to two decimal places.)

b.The NPV of project A is $______. (Round to the nearest cent.)

The NPV of project B is $_______.(Round to the nearest cent.)

c.The IRR of project A is _____%. (Round to two decimal places.)

The IRR of project B is ______%. (Round to two decimal places.)

d.Which project will you recommend? (Select the best answer below.)

A. Project A

B. Project B

	Project A		Project B
Initial investment (CF0)	$160,000		$130,000
Year (t)	Cash inflows (CFt)
1	$40,000		$40,000
2	$45,000		$40,000
3	$50,000		$40,000
4	$55,000		$40,000
5	$60,000		$40,000