Consider the following two mutually exclusive projects:

Year	Cash Flow (A)	Cash Flow (B)
0	- $455,000	-$65,000
1	58,000	31,000
2	85,000	28,000
3	85,000	25,500
4	572,000	19,000

Your required rate of return is 15 percent.

a) If you apply the payback period criterion, which investment will you choose? Why?

b) If you apply the discounted payback period criterion, which investment will you choose? Why?

c)If you apply the NPV criterion, which investment will you choose? Why?

d) If you apply the IRR criterion, which investment will you choose? Why?

e) If you apply the profitability index criterion, which investment will you choose? Why?

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