Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 360,000 $ 56,000 1 47,000 28,000 2 67,000 24,000 3 67,000 21,500 4 442,000 16,600 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 Period Project A 3.43 years Project B 1.81 years

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 Period Project A 3.93 years Project B 2.96 years

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.) NPV Project A $ 18299.71 Project B $ 10122.98

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.) IRR Project A 16.69 % Project B 24.53 %

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 Index Project A 1.05 Project B 1.18

e-2. If you apply the profitability index criterion, which investment will you choose? multiple choice 5 Project A Project B f.

Based on your answers in (a) through (e), which project will you finally choose? multiple choice 6 Project A Project B

Consider the following two mutually exclusive projects: 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.) 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. Round the final answers to 2 decimal places.) 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. Round the final answers to 2 decimal places. Omit $ sign in your response.) c-2. If you apply the NPV criterion, which investment will you choose? Project A Project B c- L. IT you apply the IV rV criterion, whicn Investment will you cnoose? Project A Project B d-1. What is the IRR for each project? (Round the final answers to 2 decimal places.) 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 calculation. Round the final answers to 3 decimal places.) 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? Project A Project B