1. The following two project of equal risk are mutuality exclusive alternatives for expanding the firm's capacity. The firm cost of capital is 12%. The cash flows for each project are given in the following table. Project white $60,000 Cash inflows $36,000 31,500 28,500 Project black $60,000 Cash inflows $46,500 30,000 15,000 Initial investment Year 1 3 Requires a. Calculate each project's payback period using the pay back period criterion which project is preferable? Calculate NPV for each value, using the NPV which project is preferable. Calculate the IRR to the nearest percentage for each project, using the internal rate of return, which project is preferable Calculate the probability index and using which project is preferable b. c. d