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Question 1 (10 marks = 25 points) Assume a $40,000 investment and the following cash flows for two alternative projects: year Project Project y $15.000

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Question 1 (10 marks = 25 points) Assume a $40,000 investment and the following cash flows for two alternative projects: year Project Project y $15.000 $6,000 20.000 8,000 10,000 9,000 17,000 20,000 1 2 3 4 5 Answer the following questions by: (write full answer) A) Which project would you select under the payback period method? B) Which project would you select under the present value method? Considering the discount rate as 10% C) Which project would you select using the profitability method? Considering the discount rate as 10% D) What is the internal rate of return for both of the project? And which one would you select? (use excel to find the answer of internal rate of return)

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