P1024 All techniques, conflicting rankings Nicholson Roofing Materials Inc. is considering two mutually exclusive projects that both cost $150,000. The companys board of directors has set a maximum four-year payback requirement, the cost of capital is 9%. The project cash flows appear below.

a. Calculate the payback period for each project.

b. Calculate the NPV of each project at 0%.

c. Calculate the NPV of each project at 9%.

d. Derive the IRR of each project.

e. Rank the projects by each of the techniques used. Make and justify a recommendation.

f. Go back one more time and calculate the NPV of each project using a cost of capital of 12%. Does the ranking of the two projects change compared to your answer in part e? Why?