Alex is evaluating 2 investment options, project 1 (P1) or project 2 (P2), both giving the same amount of positive NPV. The above annual cash flows are expected, and Alex expects 8% return from investment of this risk. Each project requires an initial investment in Year 0. Since Alex has a limited investment fund, he can only choose one project. 1. Given the above cash flows, which project Alex should choose and why? 2. Assuming the initial investment in Year 0 was 12,000. What would be the IRR for P2? 3. What is your understanding of the risk involved in '8% return from investment of this risk? Please explain. (maximum 15 minutes) Year 0 Project 1 -$500 $325 $325 Project 2 $400 $325 $200 1 2