Perform a financial analysis to determine the best project(s) to pursue using both the payback and the net present value (NPV) methods. Consider the following projects in your analysis:

• Project A:
  • Initial investment of $700,000;
  • Projected cash inflows of $225,000 per year for 5 years;
  • Discount rate of 15%
• Project B:
  • Initial investment of $500,000;
  • Projected cash inflows of $125,000 per year for 5 years;
  • Discount rate of 15%
• Project C:
  • Initial investment of $150,000;
  • Project cash inflows of $125,000 in years 1 and 2, $150,000 in year 3, and $175,000 in years 4 and 5;
  • Discount rate of 13%
• Project D:
  • Initial investment of $700,000;
  • Projected cash inflows of $200,000 in year 1, $225,000 in years 2 through 4, and $250,000 in year 5;
  • Discount rate of 13%

Using a multi-tabbed spreadsheet (Microsoft Excel or Google Sheets), prepare a financial analysis to compare these four projects.

• On the first tab of the spreadsheet, calculate the payback period for each of the projects and calculate the payback after the 5th year (hint: some can use the averaging method and some must use the subtraction method). Indicate which projects an organization should pursue and which should not be pursued, as well as the overall reasoning for your decisions.
• On the second tab of the spreadsheet, calculate the 5-year NPV for each of the projects using the information provided for each project. Indicate which projects an organization should pursue and which should not be pursued, as well as the overall reasoning for your decisions.