1. Fuji Software Inc. has the following mutually exclusive projects

Year	Project A	Project B
0	-$15,000	-$18,000
1	9,500	10,500
2	6,000	7,000
3	2,400	6,000

a) Suppose Fuji's payback period cut-off is two years. Which of these two projects should be chosen?

b) Suppose Fuji uses the NPV rule to rank these two projects. Which project should be chosen if the appropriate discount rate is 15 percent?

2) An investment project has annual cash inflows of $6,000, $6,500, $7,000 and $8,000, and a discount rate of 14 percent. What is the discounted payback period for these cash flows if the initial cost is $8,000? $13,000? $18,000?

ii) An investment project cost $15,000 and has annual cash flows of $3,800 for six years. What is the discounted payback period if the discounted rate is 0 percent? 10 percent? 15 percent?