4A company evaluates three different investments below, each with a required rate of return of 12% with the following cash flows:

a. Compute the Payback Period, NPV, IRR and Profitability Index for each project.

b. Determine which projects are acceptable using NPV, IRR, and PI

c. Using IRR, which project ranks as the best project? Using NPV, which project ranks as the best project?

d. If these projects are mutually exclusive, which one would you recommend?

Year 0 WN- Project 1 -120,000 10,000 20,000 40,000 50,000 40,000 40,000 40,000 Project 2 -120,000 60,000 30,000 30,000 20,000 20,000 20,000 20,000 Project 3 -10,000 7,000 7,000 7,000 4 5 6 7