Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)

0 $433,000 $44,000

1 40,000 21,200

2 66,000 12,500

3 83,000 22,600

4 548,000 19,400

The required return on these investments is 14 percent. Required:

(a) What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Payback period Project A years Project B years

(b) What is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Net present value Project A $ Project B $

(c) What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Internal rate of return Project A % Project B %

(d) What is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).) Profitability index Project A Project B

(e) Based on your answers in (a) through (d), which project will you finally choose?