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please help! 17. Comparing Investment Criteria [L01,2,3,5,7) Consider the following two mutually exclusive projects: Year 0 1 Cash Flow(A) -$ 291,000 37,000 55,000 55,600 366,000
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17. Comparing Investment Criteria [L01,2,3,5,7) Consider the following two mutually exclusive projects: Year 0 1 Cash Flow(A) -$ 291,000 37,000 55,000 55,600 366,000 Cash Flow(B) -$ 41,600 20,000 17,600 17,200 14,000 2 3 4 Whichever project you choose, if any, you require a return of 11 percent on your investment. a. If you apply the payback criterion, which investment will you choose? Why? b. If you apply the discounted payback criterion, which investment will you choose? Why? If you apply the NPV criterion, which investment will you choose? Why? d. If you apply the IRR criterion, which investment will you choose? Why? If you apply the profitability index criterion, which investment will you choose? Why? f. Based on your answers in parts (a) through (e), which project will you finally choose? Why Step by Step Solution
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