Consider the following two investment projects:

Year	Investment A end of year cash flows	Investment B end of year cash flows
2022	+$200,000	+$100,000
2023	+400,000	+100,000
2024	+400,000	+100,000
2025	+400,000	+800,000
2026	+600,000	+1,000,000

Both projects require an investment of $1,000,000 at the end of 2021. The required rate of return for both projects is 10%.

Required

Prepare a report to the CEO of the company comparing both projects and providing a recommendation based on your analysis. Your report should include the following :

Part 1

Evaluating and comparing both projects using all of the following techniques:

a. Payback period

b. Discounted payback period

c. Net present value

d. Internal rate of return

Note: you will need to show all relevant calculation and explain your findings for each method

Part 2

The CEO is very concerned about the rising inflation rate in Canada and would like to understand in a small paragraph ( 4 to 5 sentences) how would this impact the decision to invest.

Part 3

The CEO would like to know why did the analysis excluded financing costs.