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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 345,000 $ 48,500 1 50,000 24,500 2 70,000 22,500

Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 $ 345,000 $ 48,500
1 50,000 24,500
2 70,000 22,500
3 70,000 20,000
4 445,000 15,100

Whichever project you choose, if any, you require a 14 percent return on your investment.

a-1

What is the payback period for each project?

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