Theta Ltd. is analyzing two potential acquisitions:

• Acquisition A: Cost: $50,000, Life: 8 years, Required return: 7%
• Acquisition B: Cost: $40,000, Life: 6 years, Required return: 8%
• Cash flows:
  • Acquisition A: Year 1: $8,000, Year 2: $8,000, Year 3: $8,000, Year 4: $8,000, Year 5: $8,000, Year 6: $8,000, Year 7: $8,000, Year 8: $8,000
  • Acquisition B: Year 1: $10,000, Year 2: $10,000, Year 3: $8,000, Year 4: $6,000, Year 5: $5,000, Year 6: $4,000
• Requirements:

1. Calculate the NPV for both acquisitions.
2. Calculate the IRR for both acquisitions.
3. Determine the Payback Period for both acquisitions.
4. Recommend which acquisition to pursue based on NPV and IRR.