Caitlyn has to decide between two projects: A and B. Project A has an initial investment of $10,000 and generates $3,500 a year for five years while project B has an initial investment of $15,000 and generates $4,000 a year seven years. Caitlyn has a discount rate of 12%.

a) Calculate Payback for each project.

b) Calculate Payback using NPV for each project.

c) Calculate the NPV of each project. Which project is better?

d) Calculate the Internal Rate of Return for both projects.

e) Using the IRR, which project would you select if they are mutually exclusive (you can only pick one)?