Question: Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $318,519 $15,100 1 28,000 4,120 2 52,000 8,876 3 52,000

Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 $318,519 $15,100
1 28,000 4,120
2 52,000 8,876
3 52,000 13,187
4 420,000 8,835

Whichever project you choose, if any, you require a 6 percent return on your investment.

a. What is the payback period for Project A and Project B?

b. What is the discounted payback period for Project A and Project B?

c. What is the NPV for Project A and Project B?

d. What is the IRR % for Project A and Project B?

e. What is the profitability index for Project A and Project B?

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