You have been hired as consultants for Geriatric Products Limited by the board of directors. The company is considering several projects, and has provided the forecasted annual after tax cash flows in the table below. Assume that the cost of capital is 7%,

1)Calculate the NPV, IRR, payback, discounted payback, and profitability index for each project. The company requires a payback of 2 years and discounted payback of 2.5 years. (18)

2)If the firm is not constrained, and the projects are independent, which projects should the firm undertake using the criteria methods above? Are any of these recommendations contradictory, explain? (5)

3)If the company has just $8,000 (million) to spend, what would it invest in? Justify your recommendations to the board of directors. (4)

4)If B & C are mutually exclusive, which would you choose and why? What could change this decision? Provide illustrations/graphs to support your answer. (5)