A business is considering two different investment projects with the following details:

• Project A:
  • Initial Investment: £10,000
  • Yearly Cash Inflows: £3,000 for 5 years
• Project B:
  • Initial Investment: £15,000
  • Yearly Cash Inflows: £4,000 for 5 years

Requirements:

1. Calculate the Payback Period for both projects.
2. Determine the Net Present Value (NPV) using a discount rate of 9%.
3. Compute the Internal Rate of Return (IRR).
4. Analyze the risk by calculating the coefficient of variation for each project.
5. Make a recommendation on which project to pursue based on the analysis.