Your first assignment in your new position as an assistantfinancial analyst at Caledonia Products is to evaluate two new?capital-budgeting proposals. Because this is your first?assignment, you have been asked not only to provide arecommendation but also to respond to a number of questions aimedat assessing your understanding of the? capital-budgeting process.This is a standard procedure for all new financial analysts at?Caledonia, and it will serve to determine whether you are moveddirectly into the? capital-budgeting analysis department or areprovided with remedial training. The memorandum you receivedoutlining your assignment? follows:

?To: New Financial Analysts

?From: Mr. V.? Morrison, CEO, Caledonia Products ?Re:

Capital-Budgeting Analysis Provide an evaluation of twoproposed? projects, both with 55?-year expected lives and identicalinitial outlays of $150,000. Both of these projects involveadditions to Caledonia's highly successful Avalon product? line,and as a? result, the required rate of return on both projects hasbeen established at 14 percent. The expected free cash flows fromeach project are shown in the popup? window:

Initial outlay	Project A: ??$150,000		Project B: ??$150,000
Inflow year 1	??30,000		??40,000
Inflow year 2	??20,000		??40,000
Inflow year 3	?50,000		??40,000
Inflow year 4	??40,000		??40,000
Inflow year 5	?70,000		?40,000

1.What is the payback period on project? A?

2.What is the payback period on project? B?

3.What is the NPV of project? A?

4.What is the NPV of project? B?

5.What is the PI for project? A?

6.What is the PI for project? B?

7.What is the IRR for project? A?

8.What is the IRR for project? B?