Four independent alternatives are under consideration. All projects last 8 years with no salvage.

1 2 3 4

First Cost $50,000 $100,000 $200,000 $250,000

Cash Flow/yr $16,122 $34,786 $43,241 $55,440

a)If interest is 15%, rank these projects from best to worst using NPV, NPV/FC, IRR, and Payback, AW, and AW/FC.

b)Now assume these are four alternatives from one mutually exclusive project. Analyze this project using NPV (I = 15%) and IRR.