PQR Company Project Appraisal

• PQR Company is evaluating two mutually exclusive projects.
• Year 0: Project P: -500,000, Project Q: -500,000
• Year 1: Project P: 150,000, Project Q: 100,000
• Year 2: Project P: 120,000, Project Q: 130,000
• Year 3: Project P: 100,000, Project Q: 160,000
• Year 4: Project P: 80,000, Project Q: 200,000
• Cost of capital: 9%
• Requirements:
  1. Calculate the NPV for both projects.
  2. Calculate the IRR for both projects.
  3. Determine the payback period for each project.
  4. Decide which project should be undertaken based on NPV, IRR, and payback period.