(15 points) You are a senior manager at Poeing Aircrafts and have beenauthorized to spend up to $200 million for

projects. The three projects thatyou are considering have the following characteristics:Project A: Initial Investment of $150 m. Cash áow of $50 m. at year 1 and$100 m. at year 2. This is plant expansion project, where the required rate ofreturn is 10%.Project B: Initial Investment of $200 m. Cash áow of $200 m. at year 1and $100 m. at year 2. This is new product development project, where therequired rate of return is 20%.Project C: Initial Investment of $100 m. Cash Flow of $100 m. at year 1and $100 m. at year 2. This is a market expansion project and the requiredrate of return is 20%.Assume that corporate discount rate is 10%. Please o§er your recommendationsfor the projects choice backed up by your analysis. SpeciÖcally, for eachproject, Önd its NPV, PI, Payback, and IRR. When computing IRR, please alsodo the IRR on incremental cash áows (if it is needed in your opinion). Say1which project(s) each rule suggests to choose and whether you should trust therule in this particular case.A B C ImplicationsNPVIRRIncremental IRRPIPayback(Note: The solutions to quadratic equation of form ax2 + bx + c = 0 arex1 =b+pb24ac2aand x2 =bpb24ac2a). To Önd the IRR you can use yourcalculator, Excel, or the formula for solutions to quadratic equation.

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