31. Assume two mutually exclusive projects have the estimated net incremental after-tax cash flows shown below. The company's required rate of return is 12%. For each project, compute a) the net present value, b) intenal rate of return, c) profitability index and d) the payback period. e) State which project should be chosen and why. Project Initial investment Annual after-tax cash flows Year 1 Year 2 Year 3 $100,000 $150,000 20,000 30,000 40,000 50,000 60,000 39,000 39,000 39,000 39,000 39,000 39,000 Year 4 Year 5 Year 6

Financial Manager of Timmy Company is considering two projects (project A and project H), which have cash flows as follows:   Year Cash Flow of Project A (in $) Cash Flow of Project H (in $) 0   -100   -100 1     10     70 2     60     50 3     80     20   Timmy Company’s cost of capital is 10 percent.   Calculate payback, NPV, IRR, and MIRR for both projects. (Please have a step by step format to your answer with explainations. Thanks (=)

The following table contains the estimated cash flows of a project. Assume the appropriate discount rate (hurdle rate) is 14%.  Year       Operating Cash Flow  0             -$20,000  1              $7,000   2              $8,000  3              $9,000  4              $4,000   a. What is the payback period of project 1?