Question

Consider the following two mutually exclusive projects:

Year	Cash Flow (A)		Cash Flow (B)
0	–$	424,000	–$	39,500
1		44,500		20,300
2		61,500		13,400
3		78,500		18,100
4		539,000		14,900

  
The required return on these investments is 11 percent.

a. 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.)

	Payback period
Project A	years
Project B	years

b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
  

	Net present value
Project A	$
Project B	$

  
c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

	Internal rate of return
Project A		%
Project B		%

Answer 1