Question 10 Not yet answered Marked out of 10.00 p Flag question (CLO3) Gulf First Bank is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects- A and B. The relevant cash flows for each project are shown in the following table. The firm's cost of capital is 18%. Project A Project B Initial Investment $29,500 $28,000 $11,000 $11,000 $11,000 $11,000 $11,000 $9,000 Required: $9,000 1 2. 4 $11,000 2. Calculate cach project's payback period. b. Calculate the net present value (NPV) for cach project c. Calculate Profitability Index (PI) for each project. d. Summarize the preferences dictated by cach measure (Payback period, NPV, PL,) and indicate which project you would recomend. Explain why? . Besed on your understanding of capital budgeting chapter, what are the two important measures that the payback period gives and are absent from the other capital budgeting decision methods like NPV, IRR and Pl? You may use the following formulas, PV, PV = FV