The fun Foods corporation must decide on what new product lines to introduce next year .After tax cash flows are listed below along with initial investments .The firm%u2019s cost of capital is 12% and its target accounting rate of return is 20%.Assume straight %u2013line depreciations and an asset life of five years .The corporate tax rate is 35%.All projects are independent.

Projects	Investment	Year1	Year2	Year 3	Year 4	Year 5
A	$5,000	$800	$1,000	$350	$1,250	$3,000
B	$7,500	$1,250	$3,000	$2,500	$5,000	$5,000
C	$4,000	$600	$1,200	$1,200	$2,400	$3,000

a) Calculate the accounting rate of return on the project. Which projects are acceptable according to this criterion?(Note Assume net income is equal to after %u2013tax cash flow less depreciation)

b) Calculate the payback period. All projects with a payback of fewer than four years are acceptable. Which are acceptable according to this criterion?

c) Calculate the projects NPV s .Which are acceptable according to this criterion

d) Calculate the Projects IRRs .Which are acceptable according to this criterion

e) Which projects should be chosen