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Consider the following two streams of cash flows for projects A and B (15 points) PROJECTA Year 0 1 2 Costs 2000 1500 500 Benefits

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Consider the following two streams of cash flows for projects A and B (15 points) PROJECTA Year 0 1 2 Costs 2000 1500 500 Benefits 0 3000 2000 PROJECT B Year 1 2000 500 500 Costs Benches 0 1500 1500 (a) What are the breakeven periods for the two projects (without discounting)? [5] (b) Which project will you select based on breakeven period? (1) Io Calculate NPVs for the two projects assuming that the discount rate is 10% (8|| d) Which project will you select based on NPV? [1] (d) Which project will you select based on NPV? [1] (e) Calculate the ROI for the two projects [4] (f) Which project will you select based on ROI, explain. [1]

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