Question: Section B You are considering the following two mutually exclusive projects. The required return on each project is 14 percent. Year Cash Flow (A) Cash

Section B You are considering the following two mutually exclusive projects. The required return on each project is 14 percent. Year Cash Flow (A) Cash Flow (B) 0 -$54,000 -$23.000 1 12.700 11.600 2 23,200 11.200 3 27.600 12.500 46,500 6.000 AN (i) Calculate the Payback period of both projects. (2 marks) (ii) State two advantages and two disadvantages of Payback period rule? (2 marks) (ii) Calculate the IRR of both projects. (2 marks) (iv) Under what circumstances IRR may generate wronty decision? (3 marks) (v) Calculate the NPV of both projects (2 marks) (vi) Which project should you accept and what is the best reason for that decision? (2 marks)

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