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techniquesDecision

among mutually exclusive investmentsPound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are shown in the following table.

Cash flows	Project A		Project B		Project C
Initial investment (CF)	$50,000		$80,000		$80,000
Cash inflows (CF), t=1 to 5	$15,000		$27,000		$28,500

a.Calculate the payback period for each project.

b.Calculate the net present value (NPV) of each project, assuming that the firm has a cost of capital equal to

14%.

c.Calculate the internal rate of return (IRR) for each project.

d.

Indicate

which project you would recommend.