Vyshali is evaluating an investment costing $55,000 that has cash flows of $35,000 in Year 2, $36,000 in Year 3, and $5,000 in Year 4. Her employer requires a rate of return of 8 percent and has a required discounted payback period of three years. Should this project be accepted? Why? Multiple Choice No; Although the project earns more than 8 percent, there is no situation where the project can pay back on a discounted basis within three years. Yes; The project pays back on a discounted basis within the assigned time period and also produces a positive NPV. Yes; The discounted payback requirement is met and other methods of analysis are less desirable.

The Sloan Corporation is trying to choose between the following two mutually exclusive design projects. If the required return is 10 percent, what is the profitability index for each project? What is the NPV for each project? Complete the following analysis. Do not hard code values in your calculations. You must use the built-in Excel function to answer this