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Chapter 9 Net Present value and other Investment criteria 30. Matt is analyzing two mutually exclusive projects of similar size and has prepared he following data. Both projects have year 5 Project A Net present value SI 5.090 $14.63 Payback period 2.51 years 2.76 years Internal rate of retum 9.3 percent Required return 8.3 percent 8.0 percent Average accounting retum 9.0 percent 9.0 percent Matt has been asked for his best recommendation given this information. His recommendation should be to accept: a. project B because it has shorter payback period. b. both projects as they both have positive net present values. c. project A and reject project B based on their net present values. d. project B and reject project A based on their internal rate of return. the average e. project B reject A based on both the payback period and accounting return. 31. What is the profitability index for an investment with the following cash flows given a 9 percent required return? Cash Flow Year -$21.500 7,400 9,800 S 8,900 96 98 1.00 1.02 1.04 32. You are analyzing the following two mutually exclusive projects and have developed the following information. What is the crossover rate? Project A Project B Cash Flow Cash Flow -$76,900 -$84,500 $25,000 $29,000 $35,000 $40,000 $27,000 $26,000 a. 11.113 percent b. 13.008 percent c. 14.901 percent d. 16.750 percent e. 17.899 percent