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Question 4 12 pts (12 marks) Consider the following two mutually exclusive opportunities: Year Cash Flow (A) Cash Flow (B) 0 -510,000 -82,000 1 55,000

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Question 4 12 pts (12 marks) Consider the following two mutually exclusive opportunities: Year Cash Flow (A) Cash Flow (B) 0 -510,000 -82,000 1 55,000 34,000 2 62,000 32,000 3 81,000 29,500 4 590,000 17,600 Whichever project you choose, if any, you require a 13% return on your investment. 1. (3 marks) Calculate the discounted payback period for each project. If you apply the discounted payback criterion, which investment will you choose? MacBook Air $ Whichever project you choose, if any, you require a 13% return on your investment. 1. (3 marks) Calculate the discounted payback period for each project. If you apply the discounted payback criterion, which investment will you choose? 2. (2 marks) Calculate the NPV for each project. If you apply the NPV criterion, which investment will you choose? 3. (2 marks) Calculate the IRR for each project. If you apply the IRR criterion, which investment will you choose? 4. (2 marks) Calculate the profitability index for each project. If you apply the profitability index criterion, which investment will you choose? 5. (3 marks) Based on your answers in (a) through (e), which project will you finally choose? Why? HTML Editore BI U AA- IX E ENVOODIT

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