Question
Two mutually exclusive projects are under consideration with the details shown. The company's required rate of return for projects of this risk level is 16%.
Two mutually exclusive projects are under consideration with the details shown. The company's required rate of return for projects of this risk level is 16%. using this information, answer the questions below: Year Project A Project B 0 (390,000) (62,000) 1 54,000 26,000 2 78,000 27,000 3 69,000 23,500 4 434,000 18,600 A) Calculate the payback period for each project. Round to two decimals. Project A Project B B) Based on the result of the payback calculation, which project would you recommend? Answer with the letter A or B only. C) Calculate the Net Present Value for each project. Round to no decimals and do not enter dollar signs or commas. Project A Project B D) Based on the result of the net present value calculation, which project would you recommend? Answer with the letter A or B only. E) Calculate the Profitability Index for each project. Round to two decimals. Project A Project B F) Based on the result of the profitability index calculation, which project would you recommend? Answer with the letter A or B only.
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