Consider the following two mutually exclusive projects:

Year	Cash Flow (Project A)	Cash Flow (Project B)
0	-$150,000	-$20,000
1	10,000	9,500
2	25,000	6,000
3	25,000	9,000
4	195,000	5,250

The required rate of return of both projects is 15%.

a. If you apply the payback criterion, which project will you choose?

b. If you apply the NPV criterion, which project will you choose?

c. If you apply profitability index, which project will you choose?

d. Find the internal rate of return (IRR) of each project.

e. Explain why investing in the project with higher IRR may not be a value-enhancing decision.