Question: Specifically having trouble with H-1... Consider the following two projects: Cash flows o o Project A Project B -$200 -$200 80 100 80 100 100

 Specifically having trouble with H-1... Consider the following two projects: Cashflows o o Project A Project B -$200 -$200 80 100 80

Specifically having trouble with H-1...

Consider the following two projects: Cash flows o o Project A Project B -$200 -$200 80 100 80 100 100 80 o o sa 80 a. If the opportunity cost of capital is 11%, which of these two projects would you accept (A, B, or both)? b. Suppose that you can choose only one of these two projects. Which would you choose? The discount rate is still 11%. c. Which one would you choose if the cost of capital is 16%? d. What is the payback period of each project? e. Is the project with the shortest payback period also the one with the highest NPV? f. What are the internal rates of return on the two projects? g. Does the IRR rule in this case give the same answer as NPV? h-1. If the opportunity cost of capital is 11%, what is the profitability index for each project? h-2. Is the project with the highest profitability index also the one with the highest NPV? h-3. Which measure should you use to choose between the projects? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req A Req B ReqC Reg D Req e RegF Reg G Req H 1 Reg H1 Req H2 Reg H2 Reg H 3 If the opportunity cost of capital is 11%, what is the profitability index for each project? (Round your answers to 2 decimal places.) Project A 1.23 Project B 1.22X Profitability Index

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