6. Consider the following two mutually exclusive projects ( F and G ). Whichever project you choose, if any, you require a 10 percent return on your investment. a. Calculate the payback period for each project. ( 4 marks) b. Calculate the net present value (NPV) of each project. (4 marks) c. Based on (a), (b) as well as the given IRR, which project will you finally choose? Explain. (2 marks) 7. TEV Inc., is considering an expansion project. The project requires an initial fixed asset investment of $3.9 million. The fixed asset will be depreciated straight-line to zero over its three-year life, after which time it will be worthless. The project also requires an initial investment in net working capital of $360,000. The firm has already paid a consulting firm $80,000 to determine the viability of the project. The project is estimated to generate $3,250,000 in annual sales, with costs of $1,500,000. The tax rate is 20 percent and the required return is 12 percent. a. Determine the OCF for the expansion project. ( 3 marks) b. What is the project's Year 0 net cash flow? Year 1? Year 2? Year 3 ? (8 marks) c. What is the project's NPV? Should the project be accepted? Explain. ( 3 marks)