Consider the following two mutually exclusive projects:

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Year | Cash Flow (A) | Cash Flow (B) | |||||

0 | –$ | 350,000 | –$ | 50,000 | |||

1 | 45,000 | 24,000 | |||||

2 | 65,000 | 22,000 | |||||

3 | 65,000 | 19,500 | |||||

4 | 440,000 | 14,600 | |||||

Whichever project you choose, if any, you require a 15% return on your investment.

**a-1.** What is the payback period for each project? **(Round the final answers to 2 decimal places.)**

Payback Period | |

Project A | years |

Project B | years |

**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. Round the final answers to 2 decimal places.)**

Discounted Payback Period | |

Project A | years |

Project B | years |

**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. Round the final answers to 2 decimal places. Omit $ sign in your response.)**

NPV | |

Project A | $ |

Project B | $ |

**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? **(Round the final answers to 2 decimal places.)**

IRR | |

Project A | % |

Project B | % |

**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 calculation. Round the final answers to 3 decimal places.)**

Profitability Index | |

Project A | |

Project B | |

**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?

- Project A
- Project B. Get Finance homework help today