Question: Two mutually exclusive projects are under consideration: Year Project A Project B 0 -$5,000 -$9,000 1 2,750 1,000 2 2,750 3,000 3 2,750 5,000 4

Two mutually exclusive projects are under consideration: Year Project A Project

Two mutually exclusive projects are under consideration: Year Project A Project B 0 -$5,000 -$9,000 1 2,750 1,000 2 2,750 3,000 3 2,750 5,000 4 2,750 7,000 5 2,750 9,000 (a) Which project should be selected if the simple payback method is used to make the determination? (b) Which project should be selected if NPW were used? (c) Explain any differences in results

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