Management of BMTC Ltd. has $25,000 to investment and two viable options Project A requires initial cash outflow of $25,000 and will return cash inflows of $10,000 every year from year 1 to 5 There is no salvage value for the equipment at the end of 5 years. Project B requires initial cash outflow of $20,000 today, cash outflow of $5,000 in year 1, and cash inflows of $10,000 in year 2, $15,000 in year 3, $20,000 in year 4. In year 5, the equipment can be sold for $4,000. BMTC Ltd uses a 6% discount rate. Calculate the NPV for each project. Project A Years Cash outflows Cash inflows Net cash flows PV factor Present value 0 1-5 Net present value Project B Years Cash outflows Cash inflows Net cash flows PV factor Present value 0 1 2 3 4 5 Net present value Which project should be selected? Which project meets the required return? Payback period for Project A = years Profitability index for Project A= Internal Rate of Return for Project B=