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Integrative-Conflicting Rankings The High-Flying Growth Company (HFGC) has been expanding very rapidly in recent years, making its shareholders rich in the process. The average annual rate of retum on the stock in the past few years has been 24%, and HFGC managers believe that 24% is a reasonable figure for the firm's cost of capital. To sustain a high growth rate, HFGCH CEO argues that the company must continue to invest in projects that offer the highest rate of return possible. Two projects are currently under review. The first is an expansion of the firm's production capacity, and the second project involves introducing one of the firm's existing products into a new market. Cash flows from each project appear in the following table: a. Calculate the NPV for both projects. Rank the projects based on their NPV b. Calculate the IRR for both projects. Rank the projects based on their IRRI c. Calculate the Pi for both project Rank the projects based on their Pls d. The firm can only afford to undertake one of these investments. What do you think the firm should do? Data Table in order to copy the contents of the data table below Click on the icon here nto a spreadsheet.) Year 0 1 2 3 4 Plant expansion - $3,300,000 $2,000,000 $1,750,000 $2,250,000 $1,750,000 Product introduction - $500,000 $325,000 $350,000 $275,000 $375,000 Print Done

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