Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)

0 -$420,000 -$37,500

1 46,500 19,900

2 59,500 13,800

3 76,500 16,100

4 535,000 12,900

The required return on these investments is 10 percent.

a. What is the payback period for each project? (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? (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? (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? (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?