his Question: 1 pt 1 of 1 i n product FRONTEM. V. MUSOLEU, LUP Re: Capital-Budgeting Analysis US Provide an evaluation of two proposed projects, both with 5-year expected lives and identical to outlays of $110,000. Both of these projects involve addition to Caledonia's highly co rate of return on both projects has been established at 13 percent. The expected free cash fows from each project are shown in the popup window In evaluating these projects, please respond to the following questions a. Why is the capital-budgeting process so important? b. Why is it difficult to find exceptionally profitable projects? 0 Data Table c. What is the payback period on each project? If Caledonia imposes a 4-year maximum acceptable paybad d. What are the criticisms of the payback period? e. Determine the NPV for each of these projects. Should either project be accepted? f. Describe the logic behind the NPV. PROJECT A PROJECT B g. Determine the PI for each of these projects. Should either project be accepted Initial outley -$110.000 - $110,000 the MIDI D ent Inflow year 1 10,000 when d. What are the criticisms of the payback period? (Select all that apply.) Inflow year 2 30.000 40,000 40,000 Infow year 4 60,000 A. The method does not take into account the time value of money. 80,000 B. The method ignores cash flows occurring after the payback period. C. The selection of the maximum acceptable payback period is arbitrary. Print Done D. It is consistent with the firm's goal of shareholder wealth maximization e. What is the NPV of project A? e 40.000 $ (Round to the nearest cont.) (Select from the drop-down menus.) Caledonia should project A because its NPV is What is the NPV of project B? (Round to the nearest cont.) Caledonia should project because its NPV is Yzero. (Select from the drop-down menus) Click to select your answer(s). Save for Later