P$10-24$ All techniques: Decision among mutually exclusive investments Pound Industries is

attempting to select the best of three mutually exclusive projects. The initial invest$-$

ment and after$-$tax cash inflows associated with these projects are shown in the

following table.

a$.$ Calculate the payback period for each project.

b$.$ Calculate the net present value $($NPV$)$ of each project, assuming that the firm has

a cost of capital equal to $13\%.$

c$.$ Calculate the internal rate of return $($IRR$)$ for each project.

d$.$ Draw the net present ualue profiles for both projects on the same set of axes, and

discuss any conflict in ranking that may exist between NPV and IRR.

e$.$ Summarize the preferences dictated by each measure, and indicate which project

you would recommend. Explain why.