Your first assignment in your new position as assistant financial analyst at Caledonia Products is to evaluate two new capital$-$budgeting proposals. Because this is your first assignment, you have been asked not only to provide a recommendation but also to respond to a number of questions aimed at assessing your understanding of the capital$-$budgeting proces. This is a standard procedure for all new financial analysts at Caledonia, and it will determine whether you are moved directly into the capital$-$budgeting analysis department or are provided with remedial training. The memorandum you received outtining your assignment follows:To: The New Financial AnalystsFrom: Mr$.$ V$.$ Morrison, CEO, Caledonia ProductsRe: Capital$-$Budgeting AnalysisProvide an evaluation of two proposed projects, both with $5-$year expected lives and identical initial outlays of $$110,000.$ Both of these projects involve additions to Caledonia's highly successful Avalon product line, and as a result, the required rate of return on both projects has been established at $12$ percent. The expected free cash flows from each project are as follows:PROJECT APROJECTBInitial outlay$-$$$110,000-$$$110,000$Inflow year $120,00040,000$Inflow year $230,00040,000$Inflow year $340,00040,000$Inflow year $450,00040,000$Inflow year $570,00040,000*$ Determine the NPV for each of these projects. Should either project be accepted?$*$ Describe the logic behind the NPV$.*$ Determine the Pl for each of these projects. Should either project be accepted?$*$ Would you expect the NPV and P$|$ methods to give consistent accept$/$reject decisions? Why or why not?$*$ What would happen to the NPV and Pl for each project if the required rate of return increased? If the required rate of return decreased?$*$ Determine the IRR for each project. Should either project be accepted?$*$ How does a change in the required rate of return affect the project's internal rate of return?