Grahams Fine Restaurants is considering two mutually exclusive projects with the following cash flow streams.

Year	Project A net cash flow	Project B net cash flow
0	$130,000	$150,000
1	$40,000	$30,000
2	$40,000	$50,000
3	$40,000	$25,000
4	$40,000	$55,000

A. Compute the Payback Period for both projects. 2 marks

B. Compute the NPV of both projects, using a 15% required rate of return. 2 marks

C. Compute the PI of both projects, using the figures you calculated in part B. 2 marks

D. Using interpolation, estimate the Internal Rate of Return for both projects. 3 marks

E. Which project should the firm accept, and why? 1 mark