Question: Consider the following two mutually exclusive projects. The appropriate requried return on each investment is 13 percent. Year OHM Cash Flow (A) -$415,000 49,000 57.000

 Consider the following two mutually exclusive projects. The appropriate requried return

Consider the following two mutually exclusive projects. The appropriate requried return on each investment is 13 percent. Year OHM Cash Flow (A) -$415,000 49,000 57.000 74.000 530,000 Project A 3.44 years $ 49.346.83 16.80% 1.119 Cash Flow (B) -$35,000 19,400 14.300 13,600 10,400 Project B ? Hints Payback NPV IRR 26.59% PI Required: (a) What is the payback period for each project? Project A: Project B: (b) What is the NPV for each project? Project A: $ Project B: $ (c) What is the IRR for each project? Project A: % Project B: % (d) What is the profitability index for each project? Project A: Project B

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