Consider the following two mutually exclusive projects:

Year Cash Flow A Cash Flow B

0 -$ 54,000 -$23,000

1 $ 12,700 $ 11,600

2 $ 23,200 $ 11,200

3 $ 27,600 $ 12,500

4 $ 46,500 $ 6,000

The company requires a return of 14% on the investment.

a) Which project should the company choose based on Payback period and why?

b) Which project should the company choose based on NPV and why?

c) Which project should the company choose based on IRR and why?

d) Which project should the company choose based on Profitability Index and why?

e) Which project should the company finally choose and why?

Each question need to also answer short answer (50words).