Consider the following two mutually exclusive projects:

Year	Cash Flow (A)		Cash Flow (B)
0	$	425,000			$	95,000
1		120,000				54,000
2		80,000				37,000
3		80,000				34,500
4		480,000				29,600

Whichever project you choose, if any, you require a 15% return on your investment.

a-1. What is the payback period for each project? (Round the final answers to 2 decimal places.)

	Payback Period
Project A	4.05 Numeric Response 1.Edit Unavailable. 4.05 incorrect.years
Project B	2.12 Numeric Response 2.Edit Unavailable. 2.12 correct.years

a-2. If you apply the payback criterion, which investment will you choose?

multiple choice 1

Project A Incorrect

Project B

b-1. What is the discounted payback period for each project? (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

	Discounted Payback Period
Project A	3.76 Numeric Response 3.Edit Unavailable. 3.76 correct.years
Project B	2.88 Numeric Response 4.Edit Unavailable. 2.88 correct.years

b-2. If you apply the discounted payback criterion, which investment will you choose?

multiple choice 2

Project A Incorrect

Project B

c-1. What is the NPV for each project? (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)

	NPV
Project A	$ 335,000.00 Numeric Response 5.Edit Unavailable. 335,000.00 incorrect.
Project B	$ 60,100.00 Numeric Response 6.Edit Unavailable. 60,100.00 incorrect.

c-2. If you apply the NPV criterion, which investment will you choose?

multiple choice 3

Project A Correct

Project B

d-1. What is the IRR for each project? (Round the final answers to 2 decimal places.)

	IRR
Project A	20.79 Numeric Response 7.Edit Unavailable. 20.79 correct.%
Project B	26.10 Numeric Response 8.Edit Unavailable. 26.10 correct.%

d-2. If you apply the IRR criterion, which investment will you choose?

multiple choice 4

Project A

Project B Correct

e-1. What is the profitability index for each project? (Do not round intermediate calculation. Round the final answers to 3 decimal places.)

	Profitability Index
Project A	17.880 Numeric Response 9.Edit Unavailable. 17.880 incorrect.
Project B	16.320 Numeric Response 10.Edit Unavailable. 16.320 incorrect.

e-2. If you apply the profitability index criterion, which investment will you choose?

multiple choice 5

Project A Incorrect

Project B

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

multiple choice 6

Project A Correct