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Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $16,000 $19,000 1 10,000 11,000 2 6,500 7,500 3 2,500

Maxwell Software, Inc., has the following mutually exclusive projects.

Year

Project A

Project B

0

$16,000

$19,000

1

10,000

11,000

2

6,500

7,500

3

2,500

6,500

a-1.

Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)

Payback period

Project A

years

Project B

years

a-2.

Which, if either, of these projects should be chosen?

Project A

Project B

Both projects

Neither project

b-1.

What is the NPV for each project if the appropriate discount rate is 16 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

NPV

Project A

$

Project B

$

b-2.

Which, if either, of these projects should be chosen if the appropriate discount rate is 16 percent?

Project A

Project B

Both projects

Neither project

Ref

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