Question A [AR1: 5 Marks]

Consider the projects described in the table below:

End of Year	Project R Cash Flow ($)	Project S Cash Flow ($)
0	$90,000	$90,000
1	17,000	0
2	17,000	0
3	17,000	0
4	17,000	0
5	17,000	0
6	17,000	34,000
7	17,000	34,000
8	17,000	34,000
9	17,000	34,000
10	17,000	90,000

Both projects have an appropriate risk adjusted discount rate of 7 percent.

Required:

a.	Calculate the NPV and IRR for both projects
b.	If projects R and S are independent, which will you undertake?
c.	If projects R and S are mutually exclusive, which will you undertake?