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Problem Three (20 marks) If the cost of capital is 12%, which project should be chosen? If the cost of capital is 27% which project should be chosen? Expected Cash Flows Expected Cash Flows Year Project A Project B 0 -161,000 -58,500 1 -91,000 18,500 2 2 14,500 20,000 3 31,500 22,550 26,000 4 90,500 5 112,500 27,500 6 157,000 29,500 7 182,000 32,000 a) Construct the NPV profiles for Project A and Project B. (Note: plot the NPV's of both projects on the same graph.) The cost of capital ranges from 0% to 30% by increments of 2%. b) Calculate each project's IRR and the crossover rate of the two projects. c) Calculate each project's MIRR at a cost of capital of 12% and reinvestment rate of 10%. d) Calculate each project's regular payback period. e) Calculate each project's discounted payback period with a cost of capital of 12%. f) Calculate each project's profitability index at a cost of capital of 12%