The expected cash flows of two projects are given below. The cost of capital is 10 per cent.

(a) Calculate the payback period, net present value, internal rate of return and return on capital employed of each project.
(b) Show the rankings of the projects by each of the four methods and comment on your findings.

Project A Project B Period (5,000) (5,000) 1,000 2,500 2,500 1,500 2,000 2,000 2,000 1,000 3