You are evaluating two manually exclusive projects A and B. Both projects have initial investments that are followed by 2 years of cash flows.

Project A requires an initial investment of $50,000 and has cash flows of $29,000 in each of the next 2 years. Project B requires an initial investment of $38,000 and generates $35,000 in year one and $5,000 in year two. If the interest rate is 7% and the payback cutoff period is 2 years, calculate the following for each project:

At the bottom tell me what project if any would you choose?

Project A Project B

Calculate NPV:

Calculate IRR:

Calculate the Profitability Index:

Calculate the Payback Period :