RST Limited Cash Flow Analysis

• RST Limited is evaluating two capital projects.
• Year 0: Project E: -150,000, Project F: -150,000
• Year 1: Project E: 60,000, Project F: 20,000
• Year 2: Project E: 50,000, Project F: 40,000
• Year 3: Project E: 40,000, Project F: 60,000
• Year 4: Project E: 30,000, Project F: 80,000
• Cost of capital: 11%
• Requirements:
  1. Calculate the NPV for both projects.
  2. Calculate the IRR for both projects.
  3. Determine which project to choose based on NPV and IRR.
  4. Calculate the Discounted Payback Period for each project.