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(11-7) Kaufman Enterprises, a U.S. multinational, is evaluating two independent projects Payback, NPV, and IRR...

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(11-7) Kaufman Enterprises, a U.S. multinational, is evaluating two independent projects Payback, NPV, and IRR (Projects A and Z) of its British subsidiary for inclusion in this year's capital budget. The projects are of equal risk and should be evaluated at a risk-adjusted 11 percent cost of capital, which includes the foreign exchange risk premium. The projects' after-tax cash flows (stated in pounds), including depreciation, are as follows Project Z (75,000) 30,000 30,000 30,000 10,000 10,000 Year Project A 0 (120,000) 20,000 20,000 50,000 50,000 50,000 2 4 The spot exchange rate is $1.45 per pound. Calculate payback, NPV, and IRR for each project. Indicate the correct accept/reject decision for each criterion. For pur- poses of answering this question, assume Kaufman requires a payback of 3 years or less

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