Question

# Consider the following two mutually exclusive projects:    Year Cash Flow (A) Cash Flow (B) 0...

Consider the following two mutually exclusive projects:

Year Cash Flow
(A) Cash Flow
(B)
0 –\$ 341,000 –\$ 51,000
1 54,000 24,900
2 74,000 22,900
3 74,000 20,400
4 449,000 15,500
Whichever project you choose, if any, you require a return of 15 percent on your investment.

a-1 What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

a-2 If you apply the payback criterion, which investment will you choose?

Project A
Project B
b-1 What is the discounted payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

b-2 If you apply the discounted payback criterion, which investment will you choose?

Project A
Project B
c-1 What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

c-2 If you apply the NPV criterion, which investment will you choose?

Project A
Project B
d-1 What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

d-2 If you apply the IRR criterion, which investment will you choose?

Project A
Project B

e-1 What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)
e-2 If you apply the profitability index criterion, which investment will you choose?

Project A
Project B
f. Based on your answers in (a) through (e), which project will you finally choose?

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE   #### Earn Coins

Coins can be redeemed for fabulous gifts.