Without using excel.

1. A firm is considering investing in one of two mutually-exclusive projects - a small-scale system (Project S) or a large-scale system (Project L). Project S has a net investment of S40,000 and offers expected annual net cash flows of $5,694. Project L's time zero cost is S90,000 and offers annual expected net cash flows of $9,859. Both projects have a 20-year running life. a. Using the NPV method, which project would you reject if the discount rate is (i) 4 percent (ii) 12 percent and (iii) 15 percent? b. Calculate the IRR of each project. Make sure you can do this using the interest factor c. Using the IRR as your decision-making technique, indicate which project you would d. Show how you get the incremental IRR using the interest factor tables and linear e. What is the NPV of both projects at a 0% discount rate? tables (linear interpolation will not be necessary). reject if the cost of capital is (1) 4 percent (ii) 12 percent and (ii) 15 percent. interpolation. Round your answer to the nearest yo of 1 percent