The proposed planned expansion into new markets would require manufacturing plants being set up in various states, in this regard the production team are attempting to select the better of two mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are shown

Cash flows Project A Project B

Initial investment (CF 0 $60,000 $100,000

Cash inflows (CFt), t1 to 5 $20,000 $ 31,500

1)Calculate the following for the capital investment projects A & B: 5 marks each

1. Calculate the payback period for each project.
2. Calculate the net present value (NPV) of each project

Assuming the Internal rate of return (IRR) for Project A is 19.86% and Project B is 17.34%, summarize the preferences dictated by each measure, and indicate which project you would recommend and provide reasons for your answer