Scanlon Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher IRR, how much value will be forgone? Note that under certain conditions choosing projects on the basis of the IRR will not cause any value to be lost because the one with the higher IRR will also have the higher NPV, so no value will be lost if the IRR method is used. WACC=10.00%

		End of Year
Project	Investment	1	2	3	4
A	($2,050)	$750	$760	$770	$780
B	($4,300)	$1,500	$1,518	$1,536	$1,554

1) Calculate the Pay Back Periods of the Projec t A and B (i.e., PIA and PIB)

2) Calculate the Net Present Value, NPVA and NPVB

3) Calculate the Internal Rate of Return, IRRA and IRRB.

4) Calculate the Profitability Index, PIA and PIA

5) Find Crossover Rate (Fishers rate of intersection), if it exists. Roughly, draw NPV files of the projects. Indicate the crossover rate, intercept (Y-axis) and IRRs for each project on your drawing.

A	($2,050)	$750	$760	$770	$780
B	($4,300)	$1,500	$1,518	$1,536	$1,554
Crossover Rate
k	NPV_A	NPV_B
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
6.00%
6.50%
7.00%
7.50%
8.00%
8.50%
9.00%
9.50%
10.00%
10.50%
11.00%
11.50%
12.00%
12.50%
13.00%
13.50%
14.00%
14.50%
15.00%
15.50%
16.00%
16.50%
17.00%
17.50%
18.00%
18.50%
19.00%
19.50%
20.00%
20.50%
21.00%
21.50%
22.00%
22.50%
23.00%
23.50%
24.00%
24.50%
25.00%
25.50%
26.00%
26.50%
27.00%

Please show formulas for all, for #5, show a few of the formulas, I can figure out the rest. Thanks!