1. Comparing Investment Criteria. Consider the following two mutually exclusive projects:

Year	Cash Flow(A)	Cash Flow (B)
0	-$365,000	-$40,000
1	38,000	20,300
2	47,000	15,200
3	62,000	14,100
4	455,000	11,200

Whichever project you choose, if any, you require a return of 13 percent on your investment.

(a) If you apply the payback criterion, which investment will you choose? Why?

(b) If you apply the NPV criterion, which investment will you choose? Why?

(c) If you apply the IRR criterion, which investment will you choose? Why?

(d) If you apply the protability index criterion, which investment will you choose? Why?

(e) Based on your answers in (a) through (d), which project will you nally choose? Why?