There are two projects with the following cash flows.

Years: 0 1 2 3 4 5

Project 1: -210 125 125 175 175 -400

Project 2: 300 -95 -75 -125 -400 600

a. What are the NPVs of these two projects if market interest rate is 3%?

b. With the interest rate of 6%, please modified these two projects to let them have only one IRR for each one of them. (That means the sign of cash flows of each project only changes for one time.) And then, calculate the Modified IRRs.

c. With the interest rate of 6%, compute the discounted payback periods of both projects.

d. Please calculate the IRR of incremental cash flows based on two projects.