1)General Motors is faced with 2 different projects

Years project A Cash FlowsProject B cash flows

0(5000) $(5000) $

1501500

21002000

359002500

41001000

Interest rates in the market are 10%

1a) Calculate payback period for both projects, which project is better if both projects are mutually exclusive.

1b) Calculate payback period for both projects, which project is better if both projects are independent & the limit for payback period is 2 years.

1c) Calculate NPV for both projects, which project is better if both projects are independent.

1d) Calculate NPV for both projects, which project is better if both projects are mutually exclusive.

1e) which capital budgeting technique is better & why: the payback period or the NPV