As the CFO of TB Bank & Trust Inc. you must make a decision with respect to two investment projects,

each of which requires an up$-$front expenditure of $$25$ million. You estimate that the rate of return is $9$

percent and that the investment will produce the following after$-$tax cash flows $($in millions of dollars$)$:

Table $2$:

i$.$ What is the regular payback period for each of the projects?

$(2$ marks$)$

ii$.$ If the two projects are independent and the required return is $9$ percent, which project$($s$)$ should

the firm undertake? Justify your answer.

$(3$ marks$)$

iii. If the two projects are mutually exclusive and the required return is $11$ percent, which project

should the firm undertake? Justify your answer.

$(3$ marks$)$