I ONLY NEED TO KNOW HOW TO DO QUESTIONS 4

Question 5 (10 Marks)

Consider the following two mutually exclusive projects:

Year	Cash Flow (A)	Cash Flow (B)
0	-$350,000	-$50,000
1	45,000	24,000
2	65,000	22,000
3	65,000	19,500
4	440,000	14,600

Whichever project you choose, if any, you require a 15 percent return on your investment.

4. If you apply the discounted payback criterion, which investment will you choose? Why?