Q1. (CLO3) All techniques with NPV profile Mutually exclusive projects Fitch Industries is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projectsM and N. The relevant cash flows for each project are shown in the following table. The firm's cost of capital is 14% Project M Project N Initial investment S28,500 $27,000 $10,000 $11,000 2 $10,000 $10,000 $10,000 9,000 4 $10,000 8,000 a. Calculate each project's payback period. b. Calculate the net present value (NPV) for each project. e. Calculate the profitability Index for the two projects. d. Summarize the preferences dictated by each measure you calculated and indicate which project you would recommend. Explain why? Q2. (CLO3) Future values of annuities Ramesh Abdul wishes to choose the better of two equally costly cash flow streams: annuity X and annuity Y. X is an annuity due with a cash inflow of $9,000 for each of 6 years. Y is an ordinary annuity with a cash inflow of $10,000 for each of 6 years. Assume that Ramesh can earn 15% on his investments. a. On a purely subjective basis, which annuity do you think is more attractive? Why? b. Find the future value at the end of year 6 for both annuities. c. Use your finding in part b to indicate which annuity is more attractive. Why? Compare your finding to your subjective response in part a. Q3: Joan Messineo borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end-of-year payments. a. Calculate the annual, end-of-year loan payment. b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time