Question $1$:

Consider the following two mutually exclusive projects.

Cash Flows $($$$)$

Year Project A Project B

$0-600,000-400,000$

$1365,000250,000$

$2365,000250,000$

The discount rate for the projects is $8\%.$

a$.$ Calculate NPV$,$ IRR, MIRR, PI$,$ and payback period for the projects.

b$.$ Which project will you accept if you apply the NPV criterion? Why?

c$.$ Which project will you accept if you apply the IRR criterion? Why?

d$.$ Which project will you accept if you apply the MIRR criterion? Why?

e$.$ Which project will you accept if you apply the PI criterion? Why?

f$.$ Which project will you actually accept? Why?

Question $2$: Assume the projects in Question $1$ are independent. Which project or projects will be accepted? Why?