Answer the following:

4) A firm is considering two projects, A and B. Both are expected to last 4 years and have the following cash flows. Both projects are risky and future cash flows should be discounted at 10%. (projects are mutually exclusive) Year 0 1 Project A -300 100 200 400 -500 Project B -500 200 200 300 500 2 3 4 A. Calculate the NPV of projects A and B. state which project (or projects) should the firm accept and why. B. Calculate the payback period for projects A and B. State which projects, if any, should it undertake if the firm requires a payback period of two years or less. C. Calculate the profitability index for projects A and B. State which project (or projects) should the firm accept and why. D. Calculate the discounted payback period for projects A and B. State which projects, if any, should the firm undertake if the firm requires a discounted payback period of three years or less. E. Based on all calculations, state which project, if any, you would recommend and why