Question: please label each answer C D E F GH Annual cash Nows: Year 0 Year 1 Year 2 Year 3 Year 4 $ $ A
please label each answer C D E F GH Annual cash Nows: Year 0 Year 1 Year 2 Year 3 Year 4 $ $ A (235,000) 29,000 45,000 51,000 325,000 $ $ $ B. 447,000) 28,700 19.900 174300 16.200 A Required return 13% Output area: a. Payback (A) Payback (B) Payback criterion implies accept because it pays back sooner. b. NPV (A) NPV (B) NPV criterion implies accept because it has a higher NPV. C. IRR (A) IRR (B) IRR decision rule implies accept because its IRR is greater. 2 3 4 55 86 37 38 39 40 d. PI (A) PI(B) Profitability index criterion implies accept because its Pl is larger. e. The only decision rule that can rank mutually exclusive projects is NPV, therefore you should accept 42 43
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