Note all answers should be in text format with workings & formulas ** No excel in text.

Question 3 Winnie is a junior financial analyst of PKP Corporation and has been instruct to analyze two capital investment projects, namely, Project Pfizer and Project AZ. Both of the projects have an equal initial outlay of $80,000 and a cost of capital of 10%. As a senior financial analyst of PKP Corporation, you are required to assist Winnie on the proposed capital investment projects. The projects' expected cash flows are as follows: Cash Flow ($) Year Project Pfizer Project AZ 0 -80,000 -80,000 1 40,000 35,700 2 35,000 36,500 3 25,500 43,000 4 38,000 42,500 (a) Calculate the discounted payback period for both projects. (8 marks) (b) Calculate the net present value (NPV) for both projects. (4 marks) (c) Calculate the internal rate of return (IRR) for both projects. (11 marks) (d) If the projects are mutually exclusive, recommend the best project for PKP Corporation. Furthermore, briefly describe the reason for the recommendation. (2 marks) (Total: 25 marks)