6. Carlos O'Malley's, a popular Mexican restaurant, is outgrowing its current setting and needs to expand. Two mutually exclusive expansion projects are being considered: Project 1 (a new location) and Project 2 (remodeling the existing location). Details about the two projects are given in the table below. Each project will last into the indefinite future and, thus, can be considered a perpetuity. Assuming that Carlos has a weighted average cost of capital of 10%, answer the following questions. (10 Points) Project 1 Project 2 Description Cost New Location Remodel $ 500,000 $ 200,000 Cashflow in year 1 $ 55,000 $ 50,000 Annual Growth in Cashflows 5% 0% a. What is the NPV of each project? Project 1 NPV = b. What is the IRR of each project? [Hint: Think the definition of IRR, then solve for it.] c. Suppose the goal of Carlos O'Malley's is maximize firm value. If the projects are mutually exclusive, which project should Carlos O'Malley's choose? Explain why. d. If the projects were not mutually exclusive, how would your answer to part (c) change?