Etisalat is in the process of choosing the better of two equal-risk, independed capital expenditure projects-A and B. The relevant cash flows for each project are shown in the following table. The firm's cost of capital is 14%. Project A Project B Initial investment $27000 $25,000 1 $10,000 $11,000 2 $10,000 $10,000 3 $10,000 $9,000 4 $10,000 $8,000 Required: a. Calculate each project's payback period. what are the disadvantages of the payback period?

b. Calculate the net present value (NPV) for each project. c. Calculate Profitability Index (PI) for each project. d. If you are given the internal rate of return (IRR) for project A is 18% and IRR for Project B is 20 %, which one you select and why? e. Summarize the preferences dictated by each measure (Payback period, NPV, PI, IRR), and indicate which project you would recommend. Explain why?