Question
Consider the following two mutually exclusive projects: YearCash Flow (A)Cash Flow (B)0$343,000$50,000152,00024,700272,00022,700372,00020,2004447,00015,300 Whichever project you choose, if any, you require a 16 percent return on
Consider the following two mutually exclusive projects:
YearCash Flow
(A)Cash Flow
(B)0$343,000$50,000152,00024,700272,00022,700372,00020,2004447,00015,300
Whichever project you choose, if any, you require a 16 percent return on your investment.
a-1What is the payback period for each project?(Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Payback periodProject AyearsProject Byears
a-2If you apply the payback criterion, which investment will you choose?Project AProject B
b-1What is the discountedpayback period for each project?(Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Discounted payback periodProject AyearsProject Byears
b-2If you apply the discounted payback criterion, which investment will you choose?Project AProject B
c-1What is the NPV for each project?(Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
NPVProject A$Project B$
c-2If you apply the NPV criterion, which investment will you choose?Project AProject B
d-1What is the IRR for each project?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
IRRProject A%Project B%
d-2If you apply the IRR criterion, which investment will you choose?Project AProject B
e-1What is the profitability index for each project?(Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)
Profitability indexProject AProject B
e-2If you apply the profitability index criterion, which investment will you choose?Project AProject Bf.Based on your answers in (a) through (e), which project will you finally choose?(Click to select)Project AProject B
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