You have two projects to evaluate with the following cash flows:

• Project Q:
  • Year 0: -$8,000,000
  • Year 1: $1,000,000
  • Year 2: $2,000,000
  • Year 3: $2,500,000
  • Year 4: $3,000,000
• Project R:
  • Year 0: -$5,000,000
  • Year 1: $800,000
  • Year 2: $1,200,000
  • Year 3: $1,800,000
  • Year 4: $2,400,000

Requirements:

1. Calculate the NPV for each project at a discount rate of 10%.
2. Determine the IRR for each project.
3. Identify the payback period for each project.
4. Discuss which project should be chosen and provide a rationale.