Abigail, Inc. is evaluating two mutually exclusive projects. Both projects (A and B) will require an investment outlay of $22.000 (NINV) each. Year Project NCF Projects NCF Cumulative NCF Projects 1 $8000 $12000 $12,000 2 $8000 $8000 20,000 3 $8000 $6000 26,000 4 $8000 $4000 30,000 A. Compute the payback period for both projects. B. Compute the NPV for both projects at a discount rate of 12%. C. Compute the IRR for both projects. Matthiesen, Inc. is planning to invest $70,000 (before tax) in a training program. The $70,000 outlay will be charged off as an expense by the firm this year (year 0). The returns from the program is in the form of greater productivity and a reduction in employee turnover are estimated as follows (after tax basis): Years 1 - 10 $12,000 per year Years 11 - 15 $26,000 per year The company has estimated its cost of capital to be 7%. Assume the marginal tax rate for the firm is 40%. Should the firm undertake the training program? Why or why not? A/