*********Question P10-5 at the bottom only please.*********

Choosing between two projects acceptable payback periods Shell Camping Gear, Inc., is considering two mutually exclusive projects. Each requires an initial investment of $100,000. John Shell, president of The company, has set a maximum payback period of 4 years. The after-tax cash inflows associated with each project are shown in The following table. a. Determine The payback period of each project. b. Because they are mutually exclusive, Shell must choose one. Which should The company invest in? c. Explain why one of The projects is a better choice than The other. Personal Finance Problem G 2 P10-4 Long-term investment decision, payback method Bill Williams has The opportunity to invest in project A that costs $9,000 today and promises to pay annual end-of- year payments of $2,200, $2,500, $2,500, $2,000, and $1,800 over The next 5 years. Or, Bill can invest $9,000 in project B that promises to pay annual end-of-year payments of $1,500, $1,500, $1,500, $3,500, and $4,000 over The next 5 years. a. How long will it take for Bill to recoup his initial investment in project A? b. How long will it take for Bill to recoup his initial investment in project B? c. Using The payback period, which project should Bill choose? d. Do you see any problems with his choice? NPV Calculate The net present value (NPV) for The following 15-year projects. Comment on The acceptability of each. Assume that The firm has a cost of capital of 9%. a. Initial investment is $1,000,000; cash inflows are $150,000 per year. b. Initial investment is $2,500,000; cash inflows are $320,000 per year. c. Initial investment is $3,000,000; cash inflows are $365,000 per year