Innodata Solutions Inc. has been growing rapidly in recent years, making its shareholders rich in the process. The average annual rate of return on the stock in the last few years has been 20% and HFGC managers believe that 20% is a reasonable figure for the firm's cost of capital. To sustain a high growth rate, Innodata CEO argues that the company must continue to invest in projects that offer the highest rate of return possible. Two projects are currently under review. The first is an expansion of the firm's production capacity, and the second project involves introducing one of the firm's existing products into a new market. Cash flows from each project appear in the following table: Requirements: a) Calculate the NPV, Profitability Index (PI), IRR and payback period of both projects/ b) Rank the projects based on their NPV, Profitability Index (PI), IRR and payback period c) The firm can only afford to undertake one of these investments and the CEO favors the product introduction because it offers a higher rate of return (i.e. IRR) than plant expansion. What do you think the firm should do? Why