Waterhouse Ltd (Waterhouse) has identified two possible investment projects (A and B) that would run for a duration of four years. The initial investment is S200.000 for Project A and S300,000 for Project B. Waterhouse's cost of capital is 10 %. The expected cash inflows for each project over the next four years are as follows: Project A Projecr B Year Net cash Inflows Net cash Inflows $60,000 S65,000 $80,000 S120,000 S100,000 S100,000 $80,000 Required a Calculate the Net Present Value (NPV) for both projects b Calculate the Profitability Index for both projects c Calculate the Internal Rate of Return (IRR) for both projects (An approximate 4 marks] [2 marks] answer based on linear interpolation is acceptable). [4 marks] d Briefly comment on your answers above. Assuming the projects are mutually exclusive, which project should be recommended to Waterhouse? Briefly explain why sometimes rankings based on NPV and IRR may conflict. 3 marks) Total for Question 4 - 13 marks]