Consider the following cash flows of two mutually exclusive projects. YEAR PROJE

Question

Consider the following cash flows of two mutually exclusive projects.

YEAR          PROJECT A        PROJECT B

   0                 $-266,750            $-32,678

   1                     29,900                13,339

   2                     59,000                12,828

   3                     58,000                11,633

   4                   385,000                  9,281

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

The payback period for Project A is ???? and for Project B ???? (round to 2 decimal places)

The NPV for Project A is $ ???? for Project b $ ????? (round to 2 decimal places)

The IRR for Project A is ????? % for Project B ?????? % (round to 2 decimal places)

Based on your answers which Project will you choose?

Explanation / Answer

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