Company GHI is contemplating an investment in either Project A1 or Project A2. The company’s cost of capital is 10%, and the tax rate is 35%. The project details are as follows:

	Project A1	Project A2
Initial Investment	$1,500,000	$2,000,000
Expected Life	5 years	6 years
Annual Cash Flow	$300,000	$400,000

Requirements:

1. Calculate the payback period.
2. Calculate the NPV for both projects.
3. Calculate the IRR for both projects.

Recommend which project should be chosen.