Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 350,000 $ 50,000 1 45,000 24,000 2 65,000 22,000 3 65,000 19,500 4 440,000 14,600 Whichever project you choose, if any, you require a 15% return on your investment. If you apply the profitability index criterion, which investment will you choose?

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

"Consider the following two mutually exclusive projects:

YearCash Flow (A) Cash Flow (B)0$350,000 $50,000 1 45,000 24,000 2 65,000 22,000 3 65,000 19,500 4 440,000 14,600

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

a-1. What is the payback period for each project? (Round the final answers to 2 decimal places.)

Payback PeriodProject AyearsProject Byears

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

multiple choice 1

Project A

Project B

b-1. What is the discounted payback period for each project? (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

Discounted Payback PeriodProject AyearsProject Byears

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

multiple choice 2

Project A

Project B

c-1. What is the NPV for each project? (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)

NPVProject A$ Project B$

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? (Round the final answers to 2 decimal places.)

IRRProject A%Project B%

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 calculation. Round the final answers to 3 decimal places.)

Profitability IndexProject A Project B

"