A) XYZ Company is considering undertaking one of the four projects given below. The cost of each project is $2 million. Using the net present value (NPV) decision rule, determine which project the company should accept. Show your calculations in full. B) There are various decision models that we use to perform capital budgeting. Provide a summary of their respective characteristics by addressing issues of the decision criterion, complexity of application, time value of money, risk, and economic basis and evaluation. Critically discuss which one is the best option for a finance manager.

Cash Flow Year 1 Year 2 Jear 3 Year 4 Year 5 Discount rate Project $500 000 $ 500 000 $500 000 $ 500 000 $500 000 6% Project 2 Project 3 $ 600 000 $1000 000 $600 000 $ 800 000 $600 000 $ 600 000 $ 600 000 $ 400 000 $ 600 000 $ 200 000 9% 15% Project 4 $ 300 000 $ 500 000 $700 000 $900 000 $1 1 100 000 22%