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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 1 -$427,000 -$41,000 43,000 20,600 234 63,000 13,100 80,000
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 1 -$427,000 -$41,000 43,000 20,600 234 63,000 13,100 80,000 19,600 4 542,000 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 b. Project A Project B c. Project A Project B d. Project A Project B e. years years % %
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