Use the information below to answer the next three questions

Project A has a cost of -$15,000, and provides $4,000 first year cash-flow, and the cash flow increases by $1,000 annually until year 5

Project B costs -$15,000, and provides $13,000 first year cash-flow, followed by four years of $2,000 per year.

Assume that projects A and B are mutually exclusive and the discount rate is 10%

	CF t=0	CF t=1	CF t=2	CF t=3	CF t=4	CF t=5
Project A	-$15,000	$4,000	$5,000	$6,000	$7,000	$8,000
Project B	-$15,000	$13,000	$2,000	$2,000	$2,000	$2,000

Question 22 (1 point)

What are the NPV for each project? Based on NPV, which project will you accept and why?

Question 22 options:

	NPV(A) = $2,024.94 < NPV(B) $2,581.57, Accept B
	NPV(A) = $7,024.94 > NPV(B) $2,581.57, Accept B
	NPV(A) = $6,125.94 > NPV(B) $2,581.57, Accept A
	NPV(A) = $7,024.94 > NPV(B) $2,581.57, Accept A

Question 23 (1 point)

What are the IRRs for each project? Based on IRR, which project will you accept and why?

Question 23 options:

	IRR(A) = 24.89% >IRR(B) =20.72%>10%, Accept A
	IRR(A) = 22.19% >IRR(B) =21.72%>10%, Accept A
	IRR(A) = 20.52% 10%, Accept B
	IRR(A) = 23.89% >IRR(B) =20.72%>10%, Accept A

Question 24 (1 point)

Based on payback period, which project will you accept and why if the cutoff payback is 3 years?

Question 24 options:

	Accept project A because PB(A) = 3 years < cutoff payback
	Accept project B because PB(B) = 2 years < cutoff payback
	Accept project B because PB(B) = 3.5 years > cutoff payback
	Accept project A because PB(A) = 3 years > cutoff payback.