You are evaluating an investment project with two options. They have equal risk. The firm's cost of capital is 12%. Answer the following questions. Alternative Projects Project A Project B 130,000 85,000 120 Initial Investment Year Cash Flows 40,000 25,000 35,000 45,000 35,000 N 30,000 w 50,000 10,000 - vi 55,000 5,000 What is each project's payback - two decimal places (do not convert to months) Choose... What is the NPV of project A and project B? Choose... What is the IRR of each project? Choose... On a purely theoretical basis, NPV is the better approach to capital budgeting than IRR because NPV implicitly assumes that any intermediate cash inflows generated by an investment are reinvested at the firm's cost of capital. Select one: O True O False The cost of capital is used to decide whether a proposed corporate investment will increase or decrease a firm's stock price. Select one: O True O False