1. Calculating Payback Period and NPV Fuji Software, Inc., has the following mutually exclusive projects.

Project A

year 0 -15000

year 1 9500

year 2 6000

year 3 2400

Project B

year 0 -18000

1 10500

2 7000

3 6000

a. Suppose Fujis payback period cutoff is two years. Which of these two projects should be chosen?

b. Suppose Fuji uses the NPV rule to rank these two projects. Which project should be chosen if the appropriate discount rate is 15 percent?

Please explain step by step, specifically how did you get the numbers?

Thanks