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Q4) Mr. Hilton has the following two investment options. Year 0 1 2 Project A Cash Flows -100,000 10,000 20,000 30,000 40,000 20,000 Project B

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Q4) Mr. Hilton has the following two investment options. Year 0 1 2 Project A Cash Flows -100,000 10,000 20,000 30,000 40,000 20,000 Project B Year Cash Flows 0 -100,000 1 40,000 2 30,000 3 20,000 4 10,000 5 20,000 3 4 5 You are hired as an investment consultant and asked to calculate the following: (5) a) NPV of both the projects if applicable discount rate is 10%. Recommend which project will you choose if projects are independent and which project will you choose if projects are mutually exclusive? Explain the basis of your recommendations to Mr. Hilton. b) If both projects are mutually exclusive calculate its pay period and recommend in which project investor should invest in and why

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