Capital rationing-IRR and NPV approaches Valley Corporation is attempting to select the best of a group of independent projects competing for the firm's fixed capital budget of $4.81 million. The firm recognizes that any unused portion of this budget will earn less than its 14% cost of capital, thereby resulting in a present value of inflows that is less than the initial investment. The firm has summarized, in the following table, the key data to be used in selecting the best group of projects. Project A Initial Investment $5,310,000 IRR 16% Present value of inflows at 14% $5,710,000 B 875,000 17 1,175,000 C 2,300,000 18 D 1,725,000 15 E 875,000 21 F 2,510,000 22 G 1,425,000 19 2,600,000 1,825,000 975,000 3,010,000 1,525,000 a. Use the internal rate of return (IRR) approach to select the best group of projects. b. Use the net present value (NPV) approach to select the best group of projects. c. Compare, contrast, and discuss your findings in parts (a) and (b). d. Which projects should the firm implement? Why?