NOTE: Please show your work with details. Try to make a time table with cash flow information as solved in class. Consider basic four factors: I) initial outlay: 2) investment in NWC: 3) OCF: 4) Sales of assets for your NPV analysis. ILecture &: Capital Budgeting 1. NPV Analysis for projects with Unequal Lives Company C is considering two mutually exclusive projects with the same initial investment of $20,000 and projects would be repeated The life span of Project L is 5 years, and the life span of Project s is 4 years. Assuming a 12% discount rate, which one should this firm choose? ects. Note: "mutually exclusive [Hint]: you may compare EAA information for given proj projects with unequal lives" Cash Flows Year Project L Projeet S (20,000) (20,000) 5500 6250 7,000 7500 1250 5,500 7,500 7.250 6,000 r-12% for both b. Assume that Company C is considering two mutually exclusive projects A and B that would repeated. The project is required by law to protect the environment and the firm has following two options. Assuming a 12% discount rate, which one should this firm choose? Cash Flows Year Project A Project B (20,000 (20,000) (5,000) (6,250) (5,500) (7,000) (7,500) (7,500) (6,000) (7250) 5 r=1290 for both