mma and round if necessary. (e. g.

1) The Payback Period (PP) for project Blue is ____ years.

The Payback Period (PP) for project Green is _____ years.

2) For the following answers use two decimals after the comma and round if necessary. (e. g. 0.12555 will be 0.13 and not 13.00%

The Average Rate of Return (ARR) for project Blue is _____.

The Average Rate of Return (ARR) for project Green is _____.

3) If you were making a decision based purely on Average Rate of Return (ARR), you would select the project: ______.

If you were making a decision based purely on Payback Period (PP), you would select the project: _____.

You have been asked to evaluate the following 2 projects using only profitability models. Project Blue interest Rate = 19% Inflation = 19 Fixed Investment = $700,000 Annual Cash Inflow = $100,000 Avg. Annual Profit = $10,000 Project Green Interest Rate = 296 Inflation = 29% Fixed Investment = $480,000 Annual Cash Inflow = $80,000 Avg. Annual Profit - $25,000 The Payback Period (PP) for project Blue is years The Payback Period (PP) for project Green is years For the following answers use two decimals after the comma and round if necessary. (e. g. 0.12555 will be 0.13 and not 13.00%) The Average Rate of Return (ARR) for project Blue is The Average Rate of Return (ARR) for project Green is If you were making a decision based purely on Average Rate of Return (ARR), you would select the project If you were making a decision based purely on Payback Period (PP), you would select the project