Problem 5-1 Calculating Payback Period and NPV

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

Year		Project A		Project B
0	$	32,000	$	35,000
1		18,000		19,000
2		14,500		13,000
3		4,100		14,500

a-1.	Calculate the payback period for each project. (Round your answers to 3 decimal places. (e.g., 32.161))

	Payback period
Project A	years
Project B	years

a-2.

Which, if either, of these projects should be chosen?

	Project A
	Project B
	Both projects
	Neither project

b-1.	What is the NPV for each project if the appropriate discount rate is 15 percent? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16))

	NPV
Project A	$
Project B	$

b-2.

Which, if either, of these projects should be chosen if the appropriate discount rate is 15 percent?

	Project A
	Project B
	Both projects
	Neither project