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John Claire, the CFO of Projection Investment Ltd, isconsidering twomutually exclusive projects.YearCash Flow (X) $’000Cash Flow (Y) $’0000-40,000-40,000119,0004,000215,20012,600312,40014,90046,00028,000In each case, show your calculation clearly.a If he applies the payback criterion, which project will hechoose?b If he applies the IRR criterion, which project will hechoose?c If he applies the NPV criterion with a required return of 9%,which project will he choose?d At which discount rate (correct to 1 decimal place of apercentage) would he be indifferent between these two projects?
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