Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 11%. Use this information for the next 4 questions.

Year Project A Cash Flow Project B Cash Flow

0 -$80,000 -$180,000

1 23,000 53,000

2 23,000 53,000

3 23,000 47,000

4 20,000 47,000

5 20,000 40,000

6 20,000 27,000

What is the IRR of project B?

a	13.65%
b	13.98%
c	12.22%
d	10.55%
e	16.21%

Question 15 (4 points)

Which of the following is the payback of project A?

a	2.57 YEARS
b	3.57 YEARS
c	3.55 YEARS
d	2.00 YEARS
e	4.57 YEARS

Question 16 (4 points)

What is the Profitability Index of project A?

a	1.06
b	1.10
c	1.15
d	1.08
e	1.12

Question 17 (4 points)

Which of the following statements is true concerning projects A and B?

a	Both NPV and IRR lead to the same investment decision.
b	Due to time disparity, IRR indicates that project B should be accepted and NPV indicates that project A should be accepted.
c	Due to time disparity, IRR indicates that project A should be accepted and NPV indicates that project B should be accepted.
d	Due to size disparity, IRR indicates that project B should be accepted and NPV indicates that project A should be accepted.
e	Due to size disparity, IRR indicates that project A should be accepted and NPV indicates that project B should be accepted.