Question: Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 340,000 $ 51,500 1 55,000 25,000 2 75,000 23,000
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 340,000 $ 51,500 1 55,000 25,000 2 75,000 23,000 3 75,000 20,500 4 450,000 15,600 Whichever project you choose, if any, you require a return of 16 percent on your investment. multiple choice 2 Project A Project B c-1. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c-2. If you apply the NPV criterion, which investment will you choose? multiple choice 3 Project A Project B d-1. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d-2. If you apply the IRR criterion, which investment will you choose? multiple choice 4 Project A Project B e-1. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e-2. If you apply the profitability index criterion, which investment will you choose? multiple choice 5 Project B Project A f. Based on your answers in (a) through (e), which project will you finally choose?
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