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Calculate the payback period, IRR, MIRR, NPV, and PI for the following two mutually exclusive projects. The required rate of return is 15% and the

Calculate the payback period, IRR, MIRR, NPV, and PI for the following two mutually exclusive projects.

The required rate of return is 15% and the target payback is 4 years. 

Explain which project is preferable under each of the four capital budgeting methods mentioned above:

Table 1

Cash flows for two mutually exclusive projects

Year

Investment A

Investment B

0

-$5,000,000

-5,000,000

1

$1,500,000

$1,250,000

2

$1,500,000

$1,250,000

3

$1,500,000

$1,250,000

4

$1,500,000

$1,250,000

5

$1,500,000

$1,250,000

6

$1,500,000

$1,250,000

7

$2,000,000

$1,250,000

8

0

$1,600,000

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