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The director of capital budgeting for Giant inc. has identified two mutually exclusive projects, L and S, with the following expected net cash flows: Expected

The director of capital budgeting for Giant inc. has identified two mutually exclusive projects, L and S, with the following expected net cash flows:

Expected net cash flows

year project L Project S
0 ($100) ($100)
1 10 70
2 60 50
3 80 20

Both projects have a cost of capital of 12 percent. what is the payback period for Project S?

A. 2.5 years

B. 1.8 years

C. 2.1 years

D. 1.6 years

E. 2.8 years

Both projects have a cost capital of 12 percent. What is Project L's PI?

A. 0.862

B. 1.115

C. 1.463

D. 1.514

E. 1.137

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