8. Choice (You must choose 6 questions from among #'s 5-13 to answer): A. Paramount Carpets Company is considering purchasing new equipment costing $700,000. The company's management has estimated that the equipment will generate cash flows as follows: Net Cash Flow $200,000 Year 1 5 234 in 2 200,000 3 250,000 250,000 150,000 Considering the residual value is zero, calculate the payback period. B. The following details are provided by Doppler Systems: Project A Project B Project C Project D Initial investment $420,000 $200,000 $550,000 $500,000 PV of cash inflows $570,000 $380,000 $800,000 $390,000 Payback period (years) 3.6 3.2 4.0 2.0 NPV of project $150,000 $180,000 $250,000 -$110,000 If Doppler can fund only ONE of the four projects, which one should they fund AND WHY? (hint; consider the profitability indices)