Your superior, has just handed you the estimated cash flows for two proposed projects. Project L would take some time to build up the market and its cash flow would increase over time. Project S on the other hand, would experience a decrease in cash flow over time. Both projects have 5-year lives. Here are the project's net cash flows (in thousands of Ghana cedis). Year 0 Project L (350) Project S (350) 1 2 3 4 5 20 180 120 (100) 160 40 50 80 70 90 Both projects have risk characteristics that are similar to the firm's average project. Investors require an 11% rate of return on similar investments. Required a. What is the discounted payback period and what is its rationale? Find the discounted pay back for projects L and S. If the company's maximum acceptable payback is 2 years, indicate which of the two projects should be accepted if (1) they are mutually exclusive (2) independent. (4 Marks) b. Calculate (and interpret) the NPV and IRR for projects L and S. What is the rationale behind the NPV method? Which project should be selected? (6 Marks)