Novell, Inc., has the following mutually exclusive projects.

Year Project A. Project B

__ __

0 22, 000 25,000

1 13,000 14,000

2 9,500 10,500

3 3,100 9,500

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.)

Project A. _____ years

Project B ______ years

a-2. If the company's payback period is two years, which, if either, of these projects should be chosen? (Choose the correct answer)

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 sing. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Project A. ______

Project B. _______

b-2. Which, if either, of these projects should be chosen if the appropriate discount rate is 16 percent? (Choose the correct answer)

Project A

Project B

Both projects

Neither project