XYZ Corporation is evaluating two mutually exclusive projects with the following details:

• Project Alpha:

• Initial Investment: $200,000
• Cost of Capital: 10%
• Yearly Cash Inflows: $70,000 for 4 years

• Project Beta:

• Initial Investment: $250,000
• Cost of Capital: 12%
• Yearly Cash Inflows: $80,000 for 4 years

Requirements:

1. Compute the payback period for both projects.
2. Calculate the NPV for both projects.
3. Determine the internal rate of return (IRR) for both projects.
4. Evaluate which project is better based on the calculated metrics and justify your choice.