Question: A company is considering two mutually exclusive projects. The projected cash flows are as follows: Year Cash Flows A Cash Flows B 0 -$245,000 -$250,000

A company is considering two mutually exclusive projects. The projected cash flows are as follows:

Year Cash Flows A Cash Flows B
0 -$245,000 -$250,000
1 $70,500 $60,000
2 $85,000 $60,000
3 $90,000 $70,000
4 $125,000 $110,000

a) The companys required rate of return is 8%. Which project, if either, should the company choose?

b) What is the discounted payback period for each?

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