Question: Unless stated otherwise, interest is compounded annually, and payments occur at the end of the period. Face value for bonds is $1000. 9. (10) Calculate

Unless stated otherwise, interest is compounded annually, and payments occur at the end of the period. Face value for bonds is $1000.

9. (10) Calculate the payback and profitability index for the following projects. The maximum payback period is 2 years and the cost of capital is 14%. If the projects are mutually exclusive, which one would you prefer? Why?

Project	Time 0	1	2	3
Coffee Bins	-1000	730	400	180
Tea Time	-1100	500	500	500

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