Data table (Click on the following icon 9 in order to copy its contents into a spreadsheet.) PROJECTA PROJECT B Initial outlay - $150,000 - $150,000 Inflow year 1 30,000 40,000 Inflow year 2 20,000 40,000 Inflow year 3 30,000 40,000 Inflow year 4 60,000 40,000 Inflow year 5 60,000 40,000 Your first assignment in your new position as assistant financial analyst at Caledonia Products is to evaluate two new capital-budgeting proposals. Because this is your first assignment, you have been asked not only to provide a recommendation but also to respond to a number of questions aimed at assessing your understanding of the capital-budgeting process. This is a standard procedure for all new financial analysts at Caledonia, and it will serve to determine whether you are moved directly into the capital-budgeting analysis department or are provided with remedial training. The memorandum you received outlining your assignment follows: To: New Financial Analysts From: Mr. V. Morrison, CEO, Caledonia Products Re: Capital-Budgeting Analysis Provide an evaluation of two proposed projects, both with 5-year expected lives and identical initial outlays of $150,000. Both of these projects involve additions to Caledonia's highly successful Avalon product line, and as a result, the required rate of return on both projects has been established at 13 percent. The expected free cash flows from each project are shown in the popup window: : In evaluating these projects, please respond to the following questions: a. Why is the capital budgeting process so important? b. Why is it difficult to find taceptionally profitable projects c. What is the payback period on each project? If Caledonia imposes a 3-year maximum acceptable payback period, which of these projects should be accepted? d. What are the criticisms of the payback pentou! e. Determine the NPV for each of these projects. Should either project be accepted? Doceribo-thologic behind the APK g. Determine the Pl for each of these projects. Should either project be accepted? P bu Would you expect the ADV_and Dl mothode to give consistent accoptraject decisions? Why or why not? 1. What would happen to the NPV and Alor cach projectifthe required rate of ictum in Cascut the required rate of return decreased? j. Determine the IRR for each project. Should either project be accepted? km How deee-e-change in the required rate of roturn affect the projeto-intomol-rate of rotura? 1. What reinvestmentrete-cooumptiono-ero-implicitly made by the ADV-IRR-mothode? Which-ono-is-bottor