Q9 Assume Project A has a present value of net cash inflows of $79,600 and an initial investment of $60,000. Project B has a present value of net cash inflows of $82,500 and an initial investment of $75,000. Assuming the projects are mutually exclusive, which project should management select? A. Project A B. Project B C. Project A or B D. There is not enough data to answer the question Q10 Watertown Paper Corporation is considering adding another machine for the manufacture of corrugated cardboard. The machine would cost $900,000. It would have an estimated life of 6 years and no salvage value. The company estimates that annual revenues would increase by $400,000 and that annual expenses excluding depreciation would increase by $190,000. It uses the straight-line method to compute depreciation expense. Management has a required rate of return of 9%. Compute the annual rate of return A. Annual net income is $60,000. Annual rate of return is 13.3%. The project is acceptable based on annual rate of return result B. Annual net income is $60,000. Annual rate of return is 13.3%. The project is unacceptable based on annual rate of return result C. Annual net income is $210,000. Annual rate of return is 46.7%. The project is acceptable based on annual rate of return result D. Annual net income is $210,000. Annual rate of return is 46.7%. The project is unacceptable based on annual rate of return result Qi1 Which of the following capital budgeting methods focuses on net income rather than cash flows? A. Payback period B. Accounting annual rate of return C. Net present value D. Internal rate of return