Consider the following two mutually exclusive projects: The required return on these investments is 10 percent.

Cash Flow A

0,-420000

1,46500

2,59500

3,76500

4,535000

Cash flow B

0,-37500

1,19900

2,13800

3,16100

4,12900

a.What is the payback period for each project?

b.What is the NPV for each project?

c.What is the IRR for each project?

d.What is the profitability index for each project?

e.Based on your answers in (a) through (d), which project will you finally choose?

Doak Corp. is evaluating a project with the following cash flows:

Year Cash Flow

0 -$15,300

1 6,400

2 7,600

3 7,200

4 6,000

5 -3,400

The company uses an interest rate of 9 percent on all of its projects. Calculate the MIRR of the project using all three methods.

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