Question: Help with these questions Please answer questions 1-5 based on the following information: A and B are mutually exclusive proiects The required rate Of return


Help with these questions


Please answer questions 1-5 based on the following information: A and B are mutually exclusive proiects The required rate Of return is 12%. The cutoff period is 2.5 years. Year 1 2 3 Cash Flow (A) -$85,000 $32,400 $40,200 $36,600 Cash Flow (B) -$58,000 $27,800 $24,200 $19,800 1. 2. 3. 4. If the company applies Pl (Profitability Index) decision, which project should be recommended? a. b. c. d. Project A because it has Pl of 1.024 Project A because it has Pl of 1.054 Project B because it has Pl of 1.004 project B because it has Pl of 1.087 If the company applies IRR decision, which project should be recommended? a. b. c. d. project A because it has IRR of 13.06% project A because it has IRR of 13.35% project B because it has IRR of 12.92% project B because it has IRR of 12.22% If the company applies payback period decision, which project should be recommended? a b. c. d. e. Project A because it has payback of 2.339 years Project A because it has payback of 2.107 years Project B because it has payback of 2.333 years Project B because it has payback of 2.303 years Neither of the two projects is recommended If the company applies NPV period decision, which project should be recommended? a b. c. d. e. project B because it has NPV of $3,306.26 project B because it has NPV of $206.77 project A because it has NPV of S 7,817.00 project A because it has NPV of $2,026.92 Neither of two projects is recommended
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