You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. The required return for project A and project B is 18% and 20% respectively.

You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. The required return for project A and project B is 18% and 20% respectively. Year Year 0 Project A Cash Flow ($) -110,000 31,000 37,000 44,000 54,000 Project B Cash Flow ($) -85,000 15,000 20,000 90,000 L 115,000 4 1. Based on the information above you should calculate: a. NPV b. Payback Period; should payback in 2.7 years C. Discounted Payback Period; should payback in 3.5 years d. Profitability Index 2. Which project should we accept based on calculation result point (1)? 3. If the IRR of project A and project B is 16.92% and 29.84%, which project should we accept