1. The net cash flows related to two projects are shown in table 1 Table 1: Net cash flows (thousand Rials) YEAR 0 1 2 3 4 5 6 PROJECT A -160 20 30 PROJECT B -172 45 22 560 50 100 120 120 60 103 103 103 1. Calculate the NPV for each project, assuming 7% cost of capital. [2 marks] 2. Assuming that the two projects are independent, would you accept them if the cost of capital is 12% ? [3 marks] 3. What is the IRR of each project? [2 marks] 4. Which of the two projects would you prefer if they are mutually exclusive, given a 10% discount rate? [5 marks] Paragraph BIEE