1. You are considering projects A and B as shown below and your firm has an 8% required rate of return.

	Project A			Project B
Year	Cash Flow	Net Income		Cash Flow	Net Income
0	-168,000			-200,000
1	56,500	12,905		56,000	16,240
2	82,000	18,860		36,000	8,280
3	48,000	14,880		26,500	37,510
4	45,000	5,850		121,000	2,385
5	30,000	7,540		81,000	23,490
Avg Book Value		28,250			53,125

1. Calculate the NPV of each project.(5)

2. Calculate the Payback Period of each project.(5)

3. Calculate the Average Accounting Return of each project.(5)

4. If these projects are independent, which one(s) should be accepted? Why?(3)

e. If these projects are mutually exclusive, which one(s) should be accepted? Why?(3)