Reference no: EM132492551

Year          Cash Flow (A)             Cash Flow (B)

0                 -$355,000                   -$47,500

1                     40,000                        23,500

2                        60,000                         21,500

3                       60,000                               19,000

4                           435,000                        14,100

• Whichever project you choose, if any, you require a return of 15 percent on your investment.

Question a-1 What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Question a-2 If you apply the payback criterion, which investment will you choose? Project A

Question b-1 What is the discounted payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Question b-2 If you apply the discounted payback criterion, which investment will you choose? Project A

Question c-1 What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Question c-2 If you apply the NPV criterion, which investment will you choose? Project A

Question d-1 What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Question d-2 If you apply the IRR criterion, which investment will you choose? Project A

Question e-1 What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)

Question e-2 If you apply the profitability index criterion, which investment will you choose? Project A f.Based on your answers in (a) through (e), which project will you finally choose?