= You have been asked to evaluate the following 2 projects using only profitability models. Project Bank Project Trust Interest Rate = 5% Interest Rate = 5% Inflation = 1.5% Inflation = 2% Fixed Investment = $750,000 Fixed Investment = $600,000 Annual Cash Inflow = $100,000 Annual Cash Inflow = $350,000 Avg. Annual Profit = $50,000 Avg. Annual Profit = $100,000 = = The Payback Period (PP) for project Bank is years The Payback Period (PP) for project Trust is years For the following answers, use two decimals after the comman and round if necessary (e.g. 0.12555 will be 0.13 and not 13.00%) The Average Rate of Return (ARR) for project Bank is The Average Rate of Return (ARR) for project Trust is If you were making a decision based purely on Average Rate of Return (ARR), you would select the project If you were making a decision based purely on Payback Period (PP), you would select the project