You are an in-house investment analyst investigating two capital projects, A and Z, being proposed by your firm. Each project costs $10,000, and you have calculated the firms WACC as 12%. Your estimates of the expected cash flows of each project are as follows:

Time period	0	1	2	3	4
Project A	-$10,000	$6,500	$3,000	$3,000	$1,000
Project Z	-$10,000	$3,500	$3,500	$3,500	$3,500

a. Calculate the following for each project: (Show all work you used to obtain your answers. Dont be afraid to verbally explain your work. Words and numbers often go well together!)

The net present value (NPV),

The internal rate of return (IRR), and

The payback.

b. If the two projects are independent, which project(s) should be accepted? Show all work you used to obtain your answer. Dont be afraid to verbally explain your work. Words and numbers often go well together!

c. If the two projects are mutually exclusive, which project(s) should be accepted? Show all work you used to obtain your answer. Words and numbers often go well together!