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1. Elsyian Fields ,Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusively projects. Project Hydrogen requires an

1. Elsyian Fields ,Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusively projects. Project Hydrogen requires an initial outlay of BD 25000, project Helium requires an initial outlay of BD35000. Using the expected cash inflows given for each project in the following table.

Expected cash flow

Year

Hydrogen

Helium

1

BD6000

BD7000

2

BD6000

BD8000

3

BD8000

BD8000

4

BD4000

BD6000

5

BD4500

BD5000

6

BD2000

BD6000

Required:

3. Explain why one of the projects is the better choice than the other.

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