Question: 1 5 . Consider the two mutually exclusive projects. Whichever project you choose, if any, you require a 1 3 % return on your investment.
Consider the two mutually exclusive projects. Whichever project you choose, if any, you require a return on your investment.
a If you apply the payback criterion, which investment will you choose? Why?
b If you apply the NPV criterion, which investment will you choose? Why?
c If you apply the IRR criterion, which investment will you choose? Why?
d If you apply the profitability index criterion, which investment will you choose? Why?
e Based on your answers in a through d which project will you finally choose? Why?tableYearCash FlowACash FlowB$$
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