Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)

0 -$400,000 -$100,000

1 $ 55,000 $ 34,000

2 $ 75,000 $ 32,000

3 $ 75,000 $ 30,000

4 $450,000 $ 20,000

You require a 15% return on your investment.

If you apply the payback criterion, which investment will you choose and why?

If you apply the discounted payback period criterion, which investment will you choose and why?

If you apply the NPV criterion, which investment will you choose and why?

Considering all of the above measurements together, which investment do you choose and why?