Question: Please show calculations and formulas through excel Project S has a cost of $10,000 and is expected to produce cash flows of $3,200 per year

Please show calculations and formulas through excel

Project S has a cost of $10,000 and is expected to produce cash flows of $3,200 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,400 per year for 5 years. The cost of capital for both project is 12%.

a. Calculate the two projects NPVs, IRRs and MIRRs.

b. Construct NPV profiles for Project S and L.

c. Which project would be selected based on each ranking method, assuming they are mutually exclusive? Why?

d. What are the two potentially problems with IRR? How to make final decision under each of these situations?

e. Which project should actually be selected (final decision)? Why?

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