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chp. 10 p-10-25-All techiniques with NVP profile: Matually exclusive projects A and B, of equal risk, are alternatives for expanding Rosa Companys capacity. The firms

chp. 10 p-10-25-All techiniques with NVP profile: Matually exclusive projects A and B, of equal risk, are alternatives for expanding Rosa Companys capacity. The firms cost of capital is 13%. The cash flow for project is in the following table,. a). Calculate each projects payment period. b). Calculate the net present value (NPV) for each project. c). Calculate the internal rate of return (IRR) for each project. d). Draw the nextpresent value profiles for both projects on the same set of axes, and discuss any conflict in ranking that may exist between NPV and IRR. e).Summerize the prefererences dictated by each mesure, and indicate which project you would recommend. Explain why. Project A ProjectB.

Initial investments (CFo) $80,000 $50,000

Years Cash inflows (CFi)

1 $15,000 $15,000

2 $20,000 $15,000

3 25,000 15,000

4 30,000 15,000

5 35,000 15,000

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