1. Let Us Grow Ltd (LUG) has the opportunity to invest in two mutually exclusive investment projects. Project A would cost $300,000 and provide net after-tax cash benefits of $80,000 a year for six years. Project B would cost $200,000 and provide net after-tax cash benefits of $50,000 a year for six years.

LUGs cost of capital is 11%. For each project, compute the net present value (NPV), internal rate of return (IRR) and pay-back period (PBP). Recommend which project should be accepted.