Scenario 1. Please answer the following questions in detail.

Terminal: 1 1) Change in net WC 22) Salvage value (after tax) 3 Total $ $ Salvage Value Before Tax (1-T) 20,000 11,850 31,850 $ Project Net Cash Flows $ 1$ (260,000) $ IRR- IRR 75,800 12.7% 78,960$ 82,278 $ 117,612 Payback 3.2 years NPV = $16,312 59 (a) Would you accept the project based on NPV and IRR? 61 (6) Would you accept the project based on Payback rule if the project cut-off is 3 years? 63 Q#2 How would you explain to your CEO what NPV means? 6S Q#3 What are the advantages and disadvantages of using the Payback method only? 67 Q4 What are the advantages and disadvantages of using NPV versus IRR? 69 Q#5 Explain the difference between independent projects and mutually exclusive projects. When you are confronted with Mutually Exclusive Projects and have conflicts with NPV and IRR results, which criterion would you use (NPV or IRR) and why