Consider the following two mutually exclusive projects:

Assume you require a 13 percent return on your investment. Use the formula approach to answer the following questions: If you apply the payback criterion, which investment will you choose? Why? Show your work. If you apply the discounted payback criterion, which investment will you choose? Why? Show your work. If you apply the NPV criterion, which investment will you choose? Why? Show your work. If you apply the IRR criterion, which investment will you choose? Why? Show your work. If you apply the profitability index criterion, which investment will you choose? Why? Show your work. Based on your answers in (a) through (e), which project will you finally choose? Why?