Based on the net present value method of analysis and given the information in the problem, you should:

Question 1 options:

accept both project A and project B

accept project A and reject project B

accept project B and reject project A

reject both project A and project B

accept whichever one you want as they represent equal opportunities

Based upon the internal rate of return (IRR) and the information provided in the problem, you should:

Question 2 options:

accept both project A and project B

reject both project A and project B

accept project A and reject project B

accept project B and reject project A

ignore the IRR rule and use another method of analysis

Based upon the payback period and the information provided in the problem, you should:

Question 3 options:

accept both project A and project B

reject both project A and project B

accept project A and reject project B

accept project B and reject project A

require that management extend the payback period for project A since it has a higher initial cost

Based upon the profitability index (PI) and the information provided in the problem, you should:

Question 4 options:

	accept both project A and project B
	accept project A and reject project B
	accept project B and reject project A
	reject both project A and project B
	disregard the PI method in this case