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Sunbeam Corporation is trying to choose between the following two mutually exclusive projects. Assume that the required return is 12% for both projects. Year Project
Sunbeam Corporation is trying to choose between the following two mutually exclusive projects. Assume that the required return is 12% for both projects. Year Project A Project B 0 $7,500.00 -$20,000.00 1 $3,750.00 $3,000.00 2 $3,750.00 $8,000.00 3 $3,750.00 $13,000.00 4 $3,750.00 $18,000.00 a. If you apply "Payback" criterion, which investment you choose? Why? b. If you apply "Discounted Payback" criterion, which investment you choose? Why? c. If you apply "Profitability Index" criterion, which investment you choose? Why? d. If you apply "NPV" criterion, which investment you choose? Why'? e. If you apply "IRR" criterion, which investment you choose? Why? f. Based on your answer in (a) through (c), which project will you finally choose? Why
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