Fico Airlines Company plans to purchase a commuter airplane. The company is considering ATR 42-500 and ATR 42-600. The ATR 42-500 requires an initial cash outflow of $12,650,000 today, and ATR 42-600 requires an initial cash outflow of $17,295,200 today. The expected end-of-year cash inflows of each project are given in the following table:

Year Cash Inflow (ATR 42-500) Cash Inflow (ATR 42-600)

1 3,935,000 7,800,000

2 6,136,000 8,121,000

3 6,200,000 5,250,000

4 8,100,000(including the salvage value) 7,960,000(including the salvage value)

The weighted average cost of capital is 10.91% for both projects.

What is the IRR of each project?

What is the NPV of each project?

What is the MIRR of each project?

What is the discounted payback of each project?

Which airplane should Fico Airlines Company purchase using the NPV approach? Please explain why.