Fitch Industries is in the process of choosing the better of two equal-risk, and mutually exclusive

capital expenditure projects, H and N. The relevant cash flows for each project are shown in the

following table. The firms cost of capital is 14%.

	Project H (rand)	Project N (rand)
Initial investment:	285000	270000
Year
1	100000	110000
2	100000	100000
3	100000	90000
4	100000	80000

1.1 Calculate each projects payback period

1.2 Calculate the NPV for each project

1.3 Calculate the IRR for each project

1.4 Summarize the preferences dictated by each measure you calculated, and indicate which

project you would recommend. Explain why.