View the step-by-step solution to:

# Consider the following two mutually exclusive projects:

Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 –\$195,070 –\$32,040
1 25,800 13,379
2 60,000 11,897
3 50,000 10,634

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

Required:
(a) What is the payback period for Projects A and B? (Round your answers to 2 decimal places. (e.g., 32.16))

(b) What is the discounted payback period for Projects A and B? (Round your answers to 2 decimal places. (e.g., 32.16))

(c) What is the NPV for Projects A and B? (Do not include the dollar sign (\$). Round your answers to 2 decimal places, (e.g., 32.16))

(d) What is the IRR for Projects A and B? (Do not include the percent sign (%). Round your answers to 2 decimal places. (e.g., 32.16))

(e) What is the profitability index for Projects A and B? (Round your answers to 3 decimal places. (e.g., 32.161))

(f) Based on your answers in (a) through (e), you will finally choose which project?

Dear Student,... View the full answer

Consider the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0 –\$195,070 –\$32,040
1 25,800 13,379
2 60,000 11,897
3 50,000 10,634
Whichever project you choose, if...

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents