Student name 1. Consider the following two mutually exclusive projects: Year 0 1 2 3 4 5 6 7 8 9 Cash Flow Project A Project B -$ 45,000-$ 40,000 $ 10,000 $ 10,000 10,000 $ 10,000 $ $ 10,000 $ 11,000 $ 10,000 $ 11,000 $ 15,000 $ 10,000 $ 15,000 $ 10,000 $ 25,000 $ 20,000 $ 25,000 $ 20,000 $ 25,000 $ 20,000 You require a 15% return on your investment. a) If you apply the payback criterion, which investment will you choose? Why? b) If you apply the NPV criterion, which investment will you choose? Why? c) If you apply the IRR criterion, which investment will you choose? Why? d) Based on your answers in A, B, and C, which project will you finally choose? Why? H

1. Consider the following two mutually exclusive projects: You require a 15% retum on your investment. a) If you apply the payback criterion, which investment will you choose? Why? b) If you apply the NPV criterion, which investment will you choose? Why? c) If you apply the IRR criterion, which investment will you choose? Why? d) Bssed on your answers in A, B, and C, which project will you finally choose? Why