A firm has shortlisted the following two alternative projects for investment of $120 million. The investment amount is proposed to be mobilized from the following sources.

Debt: $78million @12% cost

Equity $42 million @ 14% cost

(a) Determine the appropriate cost to evaluate the alternative two projects if the tax rate applicable for the firm is 30%.

(b) Apply appropriate (at least two) techniques and find the best alternative project for investment purpose.

Year	Cash flow after tax, Project A ($ Million)	Cash flow after tax Project B ($ Million)
1	74	10
2	62	26
3	54	34
4	12	79

NB: the rates should be rounded off to the nearest whole number, like- if 10.45 take 10% or if 10.56, take 11% and so on.