Lutz Rockets, Inc. is considering investing in two mutually exclusive projects. To prevent any corporate espionage in the highly competitive rocket industry, the projects will be referred to as Project A and Project Z. Lutzs required rate of return on any capital investment is 10%.

Project A requires an initial cash outlay of $200,000; the project will generate net cash flows of $100,000 per year for each of the next three years.

Project Z requires an initial cash outlay of $425,000; it will generate net cash flows of $200,000 per year for the next three years.

Project A

Payback =	2
NPV =	X
IRR =	X
MIRR =	18.29

Project Z

Payback =	X
NPV =	$72,370
IRR =	19.44%
MIRR =	X

b. Which project should Lutz choose? Explain and justify your answer. (4 pts)

c. What other factors might Lutz want to consider in their evaluation of these projects? (4 pts)