1. Investor A bought a 91-day T-Bill when the market rate is 3%. He kept these T-Bill for 38 days and then sold it to Investor B at the market rate of 2.6%. The Par value of this T-Bill is 10,000 USD. Compute: The T-Bill Yield for investor A and investor B.

Cu 2:

a. If you apply the Payback Period Method, which investment will you choose, if any? Why?

b. If you apply the NPV Method, which investment will you choose, if any, you require a 15% return on your investment? Why?

Thank you so much, can you explain to me please.

Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -175,000 USD -20,000 USD 1 10,000 USD 10,000 USD 2 25,000 USD 5,000 USD 3 25,000 USD 3,000 USD 4 375,000 USD 1,000 USD