1.

Garage, Inc., has identified the following two mutually exclusive projects:

Year	Cash Flow (A)				Cash Flow (B)
0	$	29,400			$	29,400
1		14,800				4,500
2		12,700				10,000
3		9,400				15,600
4		5,300				17,200

a-1	What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.

	IRR
Project A	%
Project B	%

a-2

Using the IRR decision rule, which project should the company accept?

	Project A
	Project B

a-3

Is this decision necessarily correct?

	Yes
	No

b-1	If the required return is 12 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	NPV
Project A	$
Project B	$

b-2

Which project will the company choose if it applies the NPV decision rule?

	Project A
	Project B

c.	At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Discount rate

%

2.

The Sloan Corporation is trying to choose between the following two mutually exclusive design projects.

Year	Cash Flow (I)				Cash Flow (II)
0	$	63,000			$	18,100
1		32,000				9,750
2		32,000				9,750
3		32,000				9,750

a-1	If the required return is 11 percent, what is the profitability index for both projects? (Do not round intermediate calculations. Round your answers to 3 decimal places, e.g., 32.161.)

	Profitability Index
Project I
Project II

a-2

If the company applies the profitability index decision rule, which project should the firm accept?

	Project I
	Project Il

b-1	What is the NPV for both projects? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	NPV
Project I	$
Project II	$

b-2

If the company applies the NPV decision rule, which project should it take?

	Project I
	Project II

3.

Consider the following two mutually exclusive projects:

Year	Cash Flow (A)				Cash Flow (B)
0	$	342,000			$	50,500
1		53,000				24,800
2		73,000				22,800
3		73,000				20,300
4		448,000				15,400

Whichever project you choose, if any, you require a 14 percent return on your investment.

a-1	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

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 and round your answers to 2 decimal places, e.g., 32.16.)

	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 and round your answers to 2 decimal places, e.g., 32.16.)

	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? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

	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 calculations and round your answers to 3 decimal places, e.g., 32.161.)

	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?
	(Click to select)Project AProject B please answer all parts of all questions, thank you much appreciated