NPV, IRR, Payback YEAR PROJECT A PROJECT B 0 -22500 0 -20000 1 6000 1 10000 2 6000 2 8000 3 6000 3 2000 4 6000 4 500 5 6000 5 500 NPV $245 NPV $(2,143) IRR 10% 3% Payback 3.8 years 3.0 years

1. comparing 2 projects with the following cash flows. Which would you recommend, based upon NPV with a 10% discount rate? 2. Which project would you recommend and why? Describe advantages / disadvantages of each of the valuation techiniques in the example.