22. The All Good Company is considering two mutually exclusive capital budgeting projects. Each of these projects has a life of two years, and costs Rs 80,000. The cash flow data for the two projects are as follows:

(a) Calculate the expected value of the annual cash flow for each of the projects.

(b) Using variability of the cash flows as the criterion, calculate the risk-adjusted NPV of each project. Use a 14% discount rate for the more risky project and a 12% discount rate for the less risky project.
(

c) Determine the internal rate of return for each of the projects.

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Project P Year 1: Cash flow (Rs) Prob. Year 2: Cash flow (Rs) Prob. 45,000 0.35 50,000 0.25 50,000 0.40 60,000 0.50 60,000 0.25 70,000 0.25 Project P Year 1: Cash flow (Rs) Prob. Year 2: Cash flow (Rs) Prob. (2,000) 0.20 10,000 0.10 40,000 0.30 45,000 0.30 50,000 0.30 65,000 0.35 72,000 0.20 80,000 0.25