1. The Blake Computer Business is trying to choose between the following two mutually exclusive projects: (note this may be done in Excel!)

Year	A	B
0	-$40,000	-$15,000
1	21,000	8,500
2	21,000	8,500
3	21,000	8,500

The cost of capital is 10%.

a. Calculate the payback period, IRR, MIRR, and NPV of each investment. For MIRR assume the reinvestment rate is equal to the companys cost of capital.

b. Assess the acceptability of each project based on each result in (a). That is, go through each answer and decide whether or not the project is acceptable under each models specific decision criteria.

c. Graph the NPV profiles of each investment. This needs to be done in Excel. You should present the discount rate on the x-axis (use a large array of potential discount rates) and the NPV should be on the y-axis. Both NPV profiles (for A and B) should be presented in the same graph.

d. Calculate the cross-over rate for these two projects.

e. Ultimately, which project would you recommend and why? Please be specific and detailed in your response.