The following two projects of equal risk are mutually exclusive alternatives for expanding the firm's capacity. The firm's cost of capital is 15%. The cash flows for each project are given in the following table. Initial investment Year PROJECT A 210,000 Net cash inflows 15,000 30,000 32,000 425,000 PROJECT B 20,000 Net cash inflows 12,000 10,500 9,500 8,200 Required: a) Calculate each project's payback period. Using the payback period criterion which project is preferable? (2 marks) b) Calculate the net present value for each project. Using the net present value criterion, which project is preferable? (4 marks) d) Calculate the profitability index. Using the profitability index criterion which project is acceptable? (2 marks) e) Discuss any conflict in ranking that may exist between the four methods used and why the NPV is the best method