Corporate Finance

1. ABC Pvt. Ltd. is considering two mutually exclusive capital investments. The projects expected net cash flows are as follows:

Expected Cash Flows
Year	Project A	Project B
0	-375	-575
1	-300	190
2	-200	190
3	-100	190
4	600	190
5	600	190
6	926	190
7	-200	0

If you were told that each projects cost of capital was 12%, which project should be selected using the NPV criteria? What is each projects IRR? What is the regular payback period for these two projects? What is the profitability index for each project if the cost of capital is 12%? (20 Marks) The answer should be a min of 800 words in Computerized word format