MNO Inc. is evaluating two mutually exclusive projects with the following characteristics:

• Project E:

• Initial Investment: $270,000
• Cost of Capital: 10%
• Cash Inflows:
  • Year 1: $90,000
  • Year 2: $100,000
  • Year 3: $110,000
  • Year 4: $120,000

• Project F:

• Initial Investment: $290,000
• Cost of Capital: 11%
• Cash Inflows:
  • Year 1: $100,000
  • Year 2: $110,000
  • Year 3: $120,000
  • Year 4: $130,000

Requirements:

1. Calculate the payback period for both projects.
2. Compute the NPV for both projects.
3. Determine the IRR for both projects.
4. Suggest which project should be selected based on the calculated values and justify your suggestion.