Consider the following two mutually exclusive projects:

Year	Cash Flow (A)				Cash Flow (B)
0	$	354,000			$	48,000
1		41,000				23,600
2		61,000				21,600
3		61,000				19,100
4		436,000				14,200

Whichever project you choose, if any, you require a 14 percent return on your investment.

a-1	What is the payback period for each project? (Round your answers to 2 decimal places. (e.g., 32.16))

	Payback period
Project A	years
Project B	years

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 and round your final answers to 2 decimal places. (e.g., 32.16))

	Discounted payback period
Project A	years
Project B	years

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 and round your final answers to 2 decimal places. (e.g., 32.16))

	NPV
Project A	$
Project B	$

c-2

If you apply the NPV criterion, which investment will you choose?

	Project A
	Project B

d-1	What is the IRR for each project? (Round your answers to 2 decimal places. (e.g., 32.16))

	IRR
Project A	%
Project B	%

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 calculations and round your final answers to 3 decimal places. (e.g., 32.161))

	Profitability index
Project A
Project B

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 B
	Project A