Consider the following two mutually exclusive projects:

Year Cash Flow

(A) Cash Flow

(B)

0 $ 341,000 $ 51,000

1 54,000 24,900

2 74,000 22,900

3 74,000 20,400

4 449,000 15,500

Whichever project you choose, if any, you require a return of 15 percent on your investment.

a-1 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.)

a-2 If you apply the payback criterion, which investment will you choose?

Project A

Project B

b-1 What is the discounted payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

b-2 If you apply the discounted payback criterion, which investment will you choose?

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?

Project A

Project B

d-1 What is the IRR for each project? (Do not round intermediate calculations. 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?

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?

Project A

Project B

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