II Mutually Exclusive Projects

Given the following information for two mutually exclusive projects, answer the questions 5-9 below. The discount rate is 10%.

PROJECT A PROJECT B

t Cash Flow Cash Flow ACCUMULATED NEED PV FV

0 (75,000) (100,000)

1 25,000 60,000

2 25,000 60,000

3 25,000 (10,000)

4 25,000 50,000

5. The payback period for project A is a. 4 years b. 3.5 years c. 3 years d. None

6. The NPV for A is a. $4,247 b. $2,447 c. $5,998 d. None

7. The PI for A is a. 1.056 b. .056 c. 2.056 d. None

8. The IRR for A is a. 12.6% b. 10.0% c. 11.4% d. None

9. The MIRR for B is a. 17.1% b. 19.2% c. 14.5% d. None