Question: 5. Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$300,000 -$40,000 $10,000 $17,000 $60,000 $14,000 $60,000 $20,000 $400,000 $10,500

5. Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$300,000 -$40,000 $10,000 $17,000 $60,000 $14,000 $60,000 $20,000 $400,000 $10,500 You require a 15% return on both investments. a. What is the payback period of each of the project? (6 points) b. What is the discounted payback period of each of the project? (6 points) c. What is the NPV of each of the project? (6 points) d. What is the profitability index (PI) of each of the project? (6 points) e. Which project should you choose based on the above information? Give one scenario that it makes sense not to choose your project based on NPV. (5 points)

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