Sharpe Manufacturing is attempting to select the best of three mutually exclusive projects. The initial cash outfl ow and after-tax cash infl ows associated with each project are shown in the...

Sharpe Manufacturing is attempting to select the best of three mutually exclusive projects. The initial cash outfl ow and after-tax cash infl ows associated with each project are shown in the following table. Cash Flows Project X Project Y Project Z Initial Cash Outf low (CFo ) $80,000 $130,000 $145,000 Cash Inf lows (CFt ), Years (t) = 1–5 27,000 41,000 43,000 a. Calculate the payback period for each project. b. Calculate the NPV of each project, assuming that the fi rm has a cost of capital equal to 13 percent. c. Calculate the IRR for each project. d. Summarize the preferences dictated by each measure and indicate which project you would recommend. Explain why