Question: Question# 2 Consider the following two mutually exclusive projects: Year Project A Project B Expected Cash flows Expected Cash ows 0 ($ 245,000) ($ 53,000)

Question# 2 Consider the following two mutually exclusive projects: Year Project A Project B Expected Cash flows Expected Cash ows 0 ($ 245,000) ($ 53,000) 1 34,000 31,900 2 49,000 3 51,000 4 325,000 Whichever project you choose, if any, you require a return of 13% on your investment. Required: a) If you apply the payback criteria which investment will you choose? Why? b) If you apply NPV criteria which investment will you choose? Why? c) If you apply IRR criteria which investment will you choose? Why? d) If you apply the protability index criteria which investment will you. choose? Why? e) Based on your answers in parts (a) through (d) which project will you finally choose? Why

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