1. Find Net Present Value (NPV) and Internal Rate of Return (IRR) for two projects. (15 points)

Expected Net Cash Flows

Year	Project A	Project B
0	-$5,000	-$5,000
1	$2,500	$0
2	$2,500	$0
3	$2,500	$5,000
4	$2,500	$2,000

a. What is the payback period for ProjectA?

b. What is the payback period for ProjectB?

c. If the opportunity cost of capital is 10%, what is the NPV of ProjectA(round to the nearestpenny)?

d. If the opportunity cost of capital is 10%, what is the NPV of ProjectB(roundto the nearestpenny)?

e. If you have a choice between Project A and Project B, which onewouldyou choose andwhy?