Questions: 1- Compute the payback period for each project. 2- Explain the rationale behind the discounted payback method? 3- Compute the net present value (NPV) for each project. BioTech uses a discount rate of 9% for projects of average risk. 4-Explain how the company would use the NPV method to rank mutually exclusive projects. 5- Without performing any calculations, explain what happens to the NPV if the company adjusts the discount rate upward for projects of higher risk or downward for projects of lower risk. Principle of finance Assignment Instructions: 1- Use a cover letter that includes the group information (name, id, and emails). 2- Make sure you understand what the question asks. 3- Make sure you answer the numeric questions clearly, showing the steps. 4- Turnitin will be used to check plagiarism. Thus, avoid copy-paste answers from the website to avoid penalties. Alternatively, make sure you answer the theoretical questions using your understanding and words. 5- The response should be direct and concise, Avoid lengthy answers. 6- Use at least two references (sources like books, articles) in the assignment (use both in text and end of text referencing). Avoid blogs and Wikipedia as references. 7- Make sure you submit the assignment during the deadline to avoid penalties. 8- The deadline will be provided to you through the blackboard. BioTech, Inc: BioTech was founded in 2006, when a number of scientists and engineers at a large fiber-optic-cable company began to see that optical fiber for the telecommunications industry was becoming a cheap commodity. They decided to start their own firm, which would specialize in cutting-edge applications for research in the life sciences and medical instruments. BioTech is now one of the leading firms in its niche field. BioTech's management attributes the firm's success to its ability to stay one step ahead of the market's fast-changing technological needs. Almost as important is BioTech's ability to select high-value-added projects and avoid commercial disasters. Over lunch, BioTech's director of research and development (R&D) mentioned to the CFO that one of his best young scientists had recently left the company because his line manager had rejected his project. Although not a pattern, R&D had experienced similar losses in the past. The two executives discussed the problem and agreed that if the R&D people understood the selection process better, they might come up with more commercially viable projects and understand the project's financial implications. The CFO has asked his assistant, Jane Donato, to prepare a retreat for the R&D department to explain the company's project selection procedures. Jane is encouraged by the thought that this group will have no trouble in following the math! BioTech's standard capital request form includes a narrative description of the project and the customer need that the company must fulfill. If the request originates with R&D, it then goes to the marketing department for a preliminary sales forecast and then to the production manager and cost analysts for cost estimates. If a proposal shows promise after these steps, it goes to the CFO, who has a staff member enter the data into a spreadsheet template. The template computes payback, discounted payback, net present value, internal rate of return, and modified internal rate of return. BioTech uses net present value as its primary decision criterion, but company executives believe that the other statistics provide some useful additional perspectives. To explain BioTech's capital budgeting techniques, Jane has decided to present the cash flows from two recent proposals: the nano test tube project and the microsurgery kit project. All figures are in thousands of dollars: Time of Cash flow Investment Nano Test Tubes -$11,000 Microsurgery Kit -$11,000 Year 1 $2000 $4000 Year2 $3000 $4000 Year3 $4000 $4000 Year4 $5000 $4000 Year5 $7000 $4000