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4. Note the following information on two mutually exclusive projects under consideration by PPP Company. PPP requires an 18 percent rate of return on projects

4. Note the following information on two mutually exclusive projects under consideration by PPP Company.

PPP requires an 18 percent rate of return on projects of this nature.

a. Compute the NPV of both projects.

b. Compute the profitability index of both projects.

c. Compute the payback period on both projects.

d. Which of the two projects, if either, should PPP accept? Why?
Annual Cash Flows Year 0 1 2 3 4 G $64.000 7.500 9,500 9,750 13,500 - H $53,000 19,750 19,750 19,750 19,750

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