Integrative-Conflicting Rankings The High-Flying Growth Company (HFGC) has been growing very 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 18%, and HFGC managers believe that 18% is a reasonable figure for the firm's cost of capital. To sustain a high growth rate, the HFGC 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: 3. a. Calculate the NPV for both projects. Rank the projects based on their NPVs. b. Calculate the IRR for both projects. Rank the projects based on their IRRs. c. Calculate the Pl for both projects. Rank the projects based on their Pls. d. The firm can only afford to undertake one of these investments. What do you think the firm should do? a. The NPV of the plant expansion project is $ . (Round to the nearest dollar.) The NPV of the product introduction project is $ . (Round to the nearest dollar.) According to the NPV method, which project should the firm choose? (Select the best answer below.) O O Plant expansion Product introduction b. The IRR of the plant expansion project is %. (Round to two decimal places.) The IRR of the product introduction project is %. (Round to two decimal places.) According to the IRR method, which project should the firm choose? (Select the best answer below.) Product introduction O Plant expansion c. The Pl of the plant expansion project is . (Round to two decimal places.) The Pl of the product introduction project is (Round to two decimal places.) According to the pl method, which project should the firm choose? (Select the best answer below.) Product introduction O Plant expansion d. If the firm can only afford to undertake one of these investments, which project should the firm choose? (Select the best answer below.) Plant expansion Product introduction (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Year e Plant expansion - $3,500,000 $2,750,000 $2,500,000 $2,500,000 $2,000,000 Product introduction - $500,000 $300,000 $400,000 $350,000 $275,000