Question $24(15$ points$)$

Amphibian Inc is considering three mutually exclusive projects, Projects A$,$ B$,$ and C$.$ The initial investment for Project $A$ is $$12,000$ and is expected to generate after$-$tax cash flows of $$6,000$ per year for five years. Project $B$ requires an initial investment of $$18,000$ and is expected to generate after$-$tax cash flows of $$10,000$ per years for three years. Project $C$ requires an initial investment of $$25,000$ and is expected to generate $$11,000$ per year for four years. All projects can be replicated. The required rate of return for $A,B,$ and C are $11\mathrm{.}75\%,9\mathrm{.}875\%,$ and $13\mathrm{.}625\%,$ respectively.

i$.$ Estimate the NPV of each project

$(6$ marks$)$

ii$.$ Estimate the payback period for each project.

$(3$ marks$)$

iii. Which project should the company undertake and why?

$(6$ marks$)$