5.b. Determine the NPV and IRR of the following projects. Determine the project to take.

Units sold L 233,333, Units sold M 171,428

Data		Project L	Project M
Cost of the new project		$690,000	$654,000
Installation costs		$ 12,000	$ 13,000
Estimated sales price in year 1		$ 180	$ 210
Variable cost per unit		$ 0.55	$ 0.50
Fixed cost year 1		$5,000	$6,000
Initial working capital needed		$14,000	$12,000
Working Capital needs % of sales		6%	7%
Depreciation method	Straight-Line		Straight-Line
Life		10	10
Salvage value		5%	15%
Tax rate		39%	39%
Beta		0.95	1.3
Risk free rate		3%	3%
Risk premium		5%	6%
Debt ratio		20%	20%
Cost of borrowing		7%	7%
Discount		14%	14%

Support, Evidence, or both (data).