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

15%.

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

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.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.

Question content area bottom

Part 1

a.The payback period of project A is

enter your response here

years.(Round to two decimal places.)

Part 2

The payback period of project B is

enter your response here

years.(Round to two decimal places.)

Part 3

b.The NPV of project A is

$enter your response here.

(Round to the nearest cent.)

Part 4

The NPV of project B is

$enter your response here.

(Round to the nearest cent.)

Part 5

c.The IRR of project A is

enter your response here%.

(Round to two decimal places.)

Part 6

The IRR of project B is

enter your response here%.

(Round to two decimal places.)

Part 7

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

Initial investment $150,000 $110,000 Year Cash inflows 1 $35,000 $35,000 2 $40,000 $35,000 3 $45,000 $35,000 4 $50,000 $35,000 5 $55,000 $35,000