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Problem 1. Suppose the cost of capital is 13% and you are considering two mutually exclusive projects, A and B, with the following cash flows:

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Problem 1. Suppose the cost of capital is 13% and you are considering two mutually exclusive projects, A and B, with the following cash flows: For project A: 50, 100, 150, 40 and 25 in years 1 through 5, respective. For project B: 20, 40, 60, 80, 180 in years 1 through 5, respective. Further suppose that the required initial investment is 200 and 180 for A and B, respectively. (All cash flows are in Thousands.) (a) Calculate the Payback of project A and project B. Which project would you select? (b) Calculate the Discounted Payback of project A and project B. Which project would you select

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