Computing Net Present Value, Internal Rate of Return, and Payback Period Questions 15 20.

FasTrac is considering investing in a Project A and Project B which will require an initial investment of $16,000. Assume FasTrac requires a 11% annual return. The expected annual cash inflows are as follows:

Project A Project B

1 $3,000 1 $4,000

2 $4,000 2 $4,000

3 $4,000 3 $4,000

4 $4,000 4 $4,000

5 $5,000 5 $4,000

6 $3,000 6 $4,000

7 $2,000 7 $4,000

8 $2,000 8 $4,000

What is the NPV for Project A?

What is the IRR for Project A?

What is the payback period for Project A?

What is the NPV for Project B?

What is the IRR for Project B?

What is the payback period for Project B?