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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 430,000 $ 42,500 1 41,500 20,900 2 64,500 12,800

Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 $ 430,000 $ 42,500
1 41,500 20,900
2 64,500 12,800
3 81,500 21,100
4 545,000 17,900

The required return on these investments is 10 percent.

What is the payback period for each project?

Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.

What is the NPV for each project?

Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.

What is the IRR for each project?

Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.

What is the profitability index for each project?

Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.

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

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