1 - The Bolster Company is considering two mutually exclusive projects:

(each question 1.5 points total marks 10) (You can use excel or financial calculator, but you need to explain which values you used in the formula to get full marks, if you only give the result, you will get half points)

YearCash Flow ACash Flow B0-$100,000-$100,000131,2500231,2500331,2500431,2500531,250200,000

The required rate of return on these projects is 12 percent.

a) What is each project's payback period? (1.5 points)

b) What is each project's discounted payback period? (1.5 points)

c) What is each project's net present value? (1.5 points)

d) What is each project's internal rate of return? (1.5 points)

e) Fully explain the results of your analysis. Which project do you prefer, and why? (4 points)