Given the following four independent projects:

Initial Outlay Project A Project B Project C Project D

-50,000 -100,000 -450,000 -175,000

Cash Flows

Year 1 10,000 125,000 200,000 50,000

Year 2 15,000 25,000 200,000 50,000

Year 3 20,000 25,000 200,000 50,000

Year 4 25,000 25,000 0 50,000

Year 5 30,000 0 0 0

A) Calculate the Pay Back Period of each project.

B) Calculate the NPV of each project at 10% cost of capital.

C) Calculate the PI of each project at 10% cost of capital.

D) Calculate the IRR of each project.

E) If you have a constraint to recover the initial investment amount within two years, which project(s) would you choose?

F) If your WACC is 18%, which independent project(s) would you accept?

G) If your WACC is 10% and the firm uses NPV as its preferred decision tool, which of these independent project(s) will you accept?