Consider the following two mutually exclusive projects:

Year	Cash Flow (Project I)	Cash Flow (Project II)
0	-$12,300	-$44,000
1	$1,800	$14,000
2	$6,000	$30,000
3	$2,000	$5,000
4	$5,000	$10,000
5	$7,000	$5,000

The required return is 10% for both projects. Assume that the internal rate of return (IRR) of Project I and Project II is 18% and 15%, respectively.

1. a) Which project will you choose if you apply the NPV criterion? Why?

   (5 marks)

2. b) Which project will you choose if you apply the payback criterion? Why? (4 marks)

3. c) Which project will you choose if you apply the IRR criterion? Why?

   (2 marks)

4. d) Based on the above answers, which project will you finally choose? Why? (3 marks)