Question: Question 2 You are evaluating two mutually exclusive projects, A and B. The projects have the following cash flows: Year 0 1 2 3 4

 Question 2 You are evaluating two mutually exclusive projects, A and

Question 2 You are evaluating two mutually exclusive projects, A and B. The projects have the following cash flows: Year 0 1 2 3 4 5 Project A -$4,500 $2,000 $1,800 $1,500 $500 $750 Project B -$4,500 $500 $750 $1,500 $1,900 $2,500 Based on the information given, calculate for both project: (a) Payback period (3 marks) (b) Net Present Value if the project's appropriate discount rate is 10 percent. (8 marks) (c) Profitability Index (2 marks) (d) Which project should the company invest? (2 marks)

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