Your firm is attempting to select the best of three mutually exclusive projects. The initial investment and subsequent cash inflows associated with these projects are shown in the following table.

Cash Flows Project A Project B Project C

Initial Investment $-$$$60,000-$$$100,000-$$$110,000$

Cash inflows

Years $1-5$

$$20,000$ $$31,500$ $$32,500$

a$.$ Calculate the payback period for each project.

b$.$ Calculate the net present value $($NPV$)$ of each project, assuming that the firm has a cost of capital equal to $13\%.$

c$.$ Calculate the internal rate of return $($IRR$)$ for each project.

d$.$ Project rankings.

e$.$ Summarize the preferences dictated by each measure, and indicate which project

you would recommend. Explain why.