You are a new financial manager and have been tasked with evaluating two projects. Upon evaluation, you are to create a business memo detailing your analysis along with the suggested course of action for the organization. All new financial managers are tashed with analyzing independent projects for the Russell Drilling, LL. Provide an analysis of two proposed projects, each with a 5-vear life and initial outlays of $210,000. Both investments have required rates of return of 12%. Rices imposes a 3 -year maximum acceptable payback period. The expected cash flows are as follows: Answer the following questions for each project: 1. Why is the capital budgeting process important to organizations like Riggs Drilling? 2. Why is it difficult to find projects that are incredibly profitable for firms? 3. What is the payback period for each project? 4. Determine the NPV for each project. 5. What would happen to the NPV if the required rate of return increased? Decreased? 6. Determine the IRR for each project. 7. Determine the profitability index for each project. 1 Items to consider and address in your memo to Riges Driline UC. Board of Directors: - Criticisms of the payback period. - Should the projects be accepted based on the criteria of the payback period; NPV; or IRR? - Should either project be accepted? - How do changes in the required rates of return affect the project's internal rate of return? - If the firm begins to accept riskier projects, how is the firm's required rate of return adjusted and how does this affect the selection process for future projects