Question-2 The following information about two mutually exclusive projects H and K are relevant for requirements (a) to (c) only. W-Max Company is considering investing in project-H, which will require an outlay of $500 million. The project will have a four-year life and at the end of that time, the equipment will be scrapped Year-1 Year-2 Year-3 Year-4 Cash inflows $540m $440m $460m $400m Cash outflows $315m $245m $265m $250m The project is expected to generate the following annual cash flows: The company has a required rate of return of 10.71%. The company normally has two- year payback criteria. The applicable tax rate is 30% The alternative project-K offers the following net cash flows: Year-0 ($500m); Year-1 $131m; Year-2 $172m; Year-3 $238m and Year-4 $281m. (a) Calculate the (i) NPV, (ii) IRR, (ii) PVI, (iv) Payback period, (v) Discounted payback period for projects Hand K. (b) Calculate the crossover rate (between projects H and K) based on the cash flow data mentioned above. Show the range of required rates for which either project-H or project-K would be preferred. (c) Based on your findings in requirements a and b above, what would be the decision of selection of project (when the required rate of return is 10.71 percent)