Question: Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 07234 -$ 430,000 -$ 42,500 1 41,500 20,900 64,500 12,800

Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash

Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 07234 -$ 430,000 -$ 42,500 1 41,500 20,900 64,500 12,800 81,500 21,100 17,900 545,000 The required return on these investments is 10 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 decimal places, e.g., 32.16. 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 years years % Project B %

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