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 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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