Manufacturing Company INC. is charged with determining which small projects should be funded. Along with this assignment, she has been granted $15,000 for a maximum of two years. They are considering three projects. Project A costs $7,500 and has cash flows of $4,000 yearly for Years 1 to 3. Project B costs $8,000 and has cash flows of $3,000, $4,000, and $3,000 for Years 1 to 3, respectively. Project C costs $2,000 and has cash inflow of $2,500 in Year 2.

1.What decisions should they make regarding these projects if there is a discount rate of 8.5 percent using NPV and IRR? (SHOW ALL WORK)

2. What is the best decision(s) if the projects were Independent? Mutually Exclusive? Why?