Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$ 421,000 -$ 38,000 20,000 13,700 16,600 13,400 46,000 60,000 77,000 536,000 The required return on these investments is 12 percent. a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. What is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. c. What is the IRR for each project? 1 2 Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. d. What is the profitability index for each project? Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161. e. Based on your answers in (a) through (d), which project will you finally choose? a. Project A Project B b. Project A Project B c. Project A Project B d. Project A Project B e. years years % % The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 -$ 88,000 -$ 56,000 1 11,400 2 35,500 29,500 3 a-1. If the required return is 11 percent, what is the profitability index for each project? Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161. a-2. If the company applies the profitability index decision rule, which project should it take? b-1. If the required return is 11 percent, what is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. If the company applies the net present value decision rule, which project should it take? 37,900 48,000 28,000 Answer is complete but not entirely correct. a-1. Project I 1.063 Project II 1.083 a-2. b-1. Project I Project II b-2. Project II $ $ Project I 93,575.38 60,653.01