Question: Consider the following two mutually exclusive projects: Year 0 Cash Flow (A) Cash Flow (B) -$ 428,000 -$ 41,500 1234 42,500 20,700 63,500 13,000
Consider the following two mutually exclusive projects: Year 0 Cash Flow (A) Cash Flow (B) -$ 428,000 -$ 41,500 1234 42,500 20,700 63,500 13,000 20,100 16,900 80,500 543,000 The required return on these investments is 14 percent. a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. What is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. c. What is the IRR for each project? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decim d. What is the profitability index for each project? Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161. e. Based on your answers in (a) through (d), which project will you finally choose? a. Project A Project B b. Project A Project B c. Project A Project B d. Project A e. Project B years years % %
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