The finance team at ABC Corporation is analyzing two projects, Project Alpha and Project Beta, which are mutually exclusive. The cost of capital is 9%, and the tax rate is 28%. The projects have the following details:

• Project Alpha:
  • Initial Cost: $500,000
  • Annual Cash Flow: $150,000 for 5 years
• Project Beta:
  • Initial Cost: $700,000
  • Annual Cash Flow: $180,000 for 6 years

Requirements:

1. Calculate the payback period for both projects.
2. Calculate the NPV for both projects.
3. Calculate the IRR for both projects.
4. Advise which project should be accepted and why.