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Consider Table 2 and project A and project B

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Consider Table 2 and project A and project B. Table 2 Period Project A Project B Net cash flows (£) Net cash flows (£) Beginning of year 0 (450,000) (55,000) End of year 1 165,000 12,000 End of year 2 135,000 22,000 End of year 3 140,000 25,000 End of year 4 140,000 26,000 a) Consider Table 2. The discount rate for both projects is 10%. Calculate the NPV for both projects. Detail all calculations that you use. b) Consider Table 2 and projects A and B. The discount rate is 10% for each project. Calculate the IRR for project A and project B. Which project would you invest in any why? Detail all calculations that you use. c) Consider Table 2 and projects A and B. The discount rate is 10% for each project. Straight-line depreciation is used. Assume NWC is zero. Calculate ARR for project A and project B. Detail all calculations that you use. d) Consider Table 2. Based on your calculations in parts a), b), and c) of this question, which project would you invest in any why? Explain your answer.

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