Question: Project E has the following cash flows: ( remember the year zero number is negative ) Year 0 Year 1 Year 2 Year 3 Year

Project E has the following cash flows: (remember the year zero number is negative)
Year 0 Year 1 Year 2 Year 3 Year 4
Cash flows -$1,000,000 $300,000 $400,000 $500,000 $500,000
6. Using a 9% cost of capital, what is the net present value of this project? Assume that Project E is mutually exclusive to Project B above. Using net present value to make the decision -- should this project be accepted over Project B?
7. Using a 9% cost of capital, what is the profitability index for this project? Assume that Project E is mutually exclusive to Project B above. Using the profitability decision model to make the decision -- should this project be accepted over Project B?
8. Using a 9% cost of capital, what is the internal rate of return for this project? Assume that Project E is mutually exclusive to Project B above. Using the internal rate of return decision model to make the decision -- should this project be accepted over Project B?
9. Using a 9% cost of capital, what is the payback period for this project? Assume that Project E is mutually exclusive to Project B above. Using the payback decision model to make the decision -- should this project be accepted over Project B?
10. Using a 9% cost of capital, what is the present value payback period for this project? Assume that Project E is mutually exclusive to Project B above. Using the present value payback decision model to make the decision -- should this project be accepted over Project B?
11. Which project should be selected?

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