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1.(20 points) Lefty's Hardware Co. plans to undertake one of the two alternative projects, say A and B, for this fiscal year. The cost

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1.(20 points) Lefty's Hardware Co. plans to undertake one of the two alternative projects, say A and B, for this fiscal year. The cost of project A is $ 75,000 and the cost of B is $90,000. The firm's cost of capital is 9% per year. After-tax cash flows are estimated to be $ 13,000 per year for ten years for project A and $ 15,000 per year for ten years for project B. Please compute the payback period, discounted payback period, IRR, NPV, and profitability index (PI) for each of these two projects. Which project should Lefty's undertake? Please be specific and show your work.

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