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1) Quantum Syphon, a manufacturing company, is considering two mutually exclusive projects. Each requires an initial investment of GHS100,000. The CEO of the company, Ms.

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1) Quantum Syphon, a manufacturing company, is considering two mutually exclusive projects. Each requires an initial investment of GHS100,000. The CEO of the company, Ms. Stephanie Badu, has set a maximum payback period of 4 years. The after-tax cash inflows associated with each project are shown in the following table: Cash inflows (CF.) Year Project A(GHS) Project B(GHS) 1 10,000 40,000 2 20,000 30,000 3 30,000 20,000 4 40,000 10,000 5 20,000 20,000 a) Determine the payback period of each project. b) Calculate the net present value (NPV) for each project using 10% required rate of return. c) Calculate the profitability index for each project using the rate in (b). d) Because they are mutually exclusive, the company must choose one. Which should the company invest in? L e) Compare the choices of the three techniques

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