Consider two mutually exclusive projects:

Year	Cash Flow (A)				Cash Flow (B)
0	$	342,000			$	50,500
1		53,000				24,800
2		73,000				22,800
3		73,000				20,300
4		448,000				15,400

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

1. What is the payback period for each project?

2. If you apply the payback criterion, which investment will you choose?

3. What is the discounted payback period for each project?

4. If you apply the discounted payback criterion, which investment will you choose?

5. What is the NPV for each project?

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

7. What is the IRR for each project?

8. If you apply the IRR criterion, which investment will you choose?

9.What is the profitability index for each project?

10. If you apply the profitability index criterion, which investment will you choose?

11.Based on your answers in (a) through (e), which project will you finally choose?