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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$427,000 01234 -$41,000 43,000 20,600 63,000 13,100 80,000 542,000 19,600
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$427,000 01234 -$41,000 43,000 20,600 63,000 13,100 80,000 542,000 19,600 16,400 The required return on these investments is 13 percent. a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose? a. Project A Project B years years b. Project A Project B C. Project A % Project B % d. Project A Project B e.
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