Please answer the highlighted questions.

I. You have two possible projects with a cost of capital of 8% and the following expected cash flows: Expected Net Cash Flows Year Franchise L Franchise S ($100) 10 60 80 (S100) 70 50 20 3 a) What is the NPV of each project? According to NPV, which project would you choose if they are mutually exclusive? NPV-L 24.21 NPV-S = 23.56 I would choose Franchise L What is each project's IRR? According to IRR, which project would you choose? IRR-L = 18.13% IRR-S = 23.56% I would choose Franchise S. b) What is each project's Modified IRR? If you use Modified IRR as your decision rule, which do you choose? Does this mirror the previous decision based on NPV or IRR? c) d) What is the Profitability Index for each project? PI = NPV/initial investment PI-L 24.21/100 = 24.21% What is the payback period for each project? What is the discounted payback for each project? Payback period-L 2+30/80-2.375 years Payback period-S 1+30/50 -1.6 years e) ** For each method above, consider the pros and cons of the method used for project decision- making