Question 2 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 projects 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 10% Project A Project B 1 $10,000 - $10,000 $10 Initial investment $26,500 $26,500 $25,000 $10,000 2 $10,000 3 $10,000 $10,000 $9,000 $10,000 $8,000 Required: a. Calculate each project's payback period. b. Calculate the net present value (NPV) for each project. {(CF/(1+r)t)- CFO) c. Calculate Profitability Index (Pl) for each project. {(CF/(1+r)t)/CFO) d. Summarize the preferences dictated by each measure (Payback period, NPV, PI.) and indicate which project you would recommend. Explain why