Consider the following two mutually exclusive projects:
Year Cash Flow A Cash Flow B
0 -358,...
Business, 13.08.2020 02:01, jamalchris4166
Consider the following two mutually exclusive projects:
Year Cash Flow A Cash Flow B
0 -358,000 –$52,000
1 37,000 2,500
2 57,000 2,200
3 57,000 2,100
4 458,000 17,500
A-1. What is the payback period for each project?
A-2. If you apply the payback criterion, which investment will you choose?
1. Project A
2. Project B
B-1. What is the discounted payback period for each project?
B-2. If you apply the discounted payback criterion, which investment will you choose?
1. Project A
2. Project B
C-1. What is the NPV for each project?
C-2. If you apply the NPV criterion, which investment will you choose?
1. Project A
2. Project B
D-1. What is the IRR for each project?
D-2. If you apply the IRR criterion, which investment will you choose?
1. Project A
2. Project B
E-1. What is the profitability index for each project?
E-2. If you apply the profitability index criterion, which investment will you choose?
1. Project A
2. Project B
F. Based on your answers in (a) through (e), which project will you finally choose?
1. Project A
2. Project B
Answers: 3
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