The Roronoa Corporation is considering two mutually exclusive projects. The cash flows associated with those projects are as follows: Year Project A Project B 0 -60,000 1 16,000 0 2 16,000 0
3 16,000 0
4 16,000 0
5 16,000 100,000
The required rate of return of these projects is 12%. i. Calculate each project's payback period? (3 marks) ii. Calculate each project's net present value? (3 marks) iii. Discuss the investment decision should be made by the company and why.