1. For the calculations of a, b, c, e, f, g, h from the data below, show all your works, and then choose which project or franchises of L and S is better?

2. For d, under the assumption that both projects are mutually exclusive, explain the case of conflict or no conflict.

(Data)

Cash Flows for Franchises L and S.

(Discount rate r or WACC is 10%)

Ls CFs

Ss CFs

1 year

-105

-105

2 year

10

70

3 year

60

50

4 year

80

20

a. NPVL and NPVS

b. IRRL and IRRS

c. MIRRL and MIRRS

d. Crossover rate or Crossover point

e. PIL and PIS

f. PaybackL and PaybackS

g. Discounted PaybackL and Discounted PaybackS

h. EAAL and EAAS

3. From the data below, identify both the economic life and physical life and then decide whether the project can accept or not. If the project can accept, explain why you can accept the project. How many years will you operate for the maximum wealth?

Project (Cost of capital: 10%)

CFs

Salvage Value

1 year

-200

200

2 year

100

100

3 year

80

50

4 year

80

0