Problem $5-1$ Calculating Payback Period and NPV

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

Year Project A Project B

$0$$$29,000$$$32,000$

$116,50017,500$

$213,00011,500$

$33,80013,000$

a$-1.$

Calculate the payback period for each project. $($Do not round intermediate calculations and round your answers to $3$ decimal places, e$.$g$.,32\mathrm{.}161.)$

a$-2.$

If the company's payback period is two years, which, if either, of these projects should be chosen?

multiple choice $1$

Project A

Project B

Both projects

Neither project

b$-1.$

What is the NPV for each project if the appropriate discount rate is $14$ 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$.,32\mathrm{.}16.)$

b$-2.$

Which, if either, of these projects should be chosen if the appropriate discount rate is $14$ percent?

multiple choice $2$

Project A

Project B

Both projects

Neither project