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Rouse Corp is considering 2 mutually exclusive capital projects with the following cash flow: year 0 project a (165,000) Project B (165,000) Year 1 A = $25,000 B= $90,000 //Year 2 A = $25,000 B = $80,000 Year 3 A = $50,000 B = $60,000 Year 4 A = $50,000 B = 40,000. Year 5 A = $225,000 B = $30,000. Each project has a useful life of 5 years. Each project has a zero salvage value at the end of the 5 year period. Depreciation willbe calculated using the straight line depreciation method. Rouse uses WACC as its minimum desired rate of return. The WACC for Rouse is currently at 12.5 %. Compute the following items for each project. a. payback period. b. IRR c. MIRR d. NPV e. explain which project you would recommend be selected along with the reasons why you selected one project over the other one.

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