Your company is reviewing two projects, Project P and Project Q, with the following cash flows:

Project P:

• Year 0: $(270)
• Year 1: $70
• Year 2: $90
• Year 3: $110
• Year 4: $130
• Year 5: $150

Project Q:

• Year 0: $(240)
• Year 1: $60
• Year 2: $80
• Year 3: $100
• Year 4: $120
• Year 5: $140

The discount rate is 13%.

a. What is the purpose of calculating NPV and IRR? b. Calculate the traditional payback period for both projects. c. Define and calculate the discounted payback period. d. Calculate NPV and IRR for both projects. e. Which project is more attractive based on NPV and IRR?