Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$429,000 –$42,000 1 42,000 20,800 2 64,000...

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Finance

Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 –$429,000       –$42,000
1 42,000       20,800
2 64,000       12,900
3 81,000       20,600
4 544,000       17,400

The required return on these investments is 11 percent.

Required:
(a)
What is the payback period for each project? (Do notround intermediate calculations. Round your answers to 2 decimalplaces (e.g., 32.16).)

Payback period
  Project A years
  Project B years

(b)
What is the NPV for each project? (Do not roundintermediate calculations. Round your answers to 2 decimal places(e.g., 32.16).)

Net present value
  Project A $
  Project B $

(c)
What is the IRR for each project? (Do not roundintermediate calculations. Enter your answers as a percentagerounded to 2 decimal places (e.g., 32.16).)

Internal rate of return
  Project A %
  Project B %

(d)
What is the profitability index for each project? (Donot round intermediate calculations. Round youranswers to 3 decimal places (e.g., 32.161).)

Profitability index
  Project A
  Project B

(e) Based on your answers in (a) through (d), which project willyou finally choose? Assume no capital constraints, so all positiveNPV investments can be funded at the discount rate.
(Click to select)Project B? Project A?

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Consider the following two mutually exclusive projects:YearCash Flow (A)Cash Flow (B)0–$429,000 –$42,000 142,000 20,800 264,000 12,900 381,000 20,600 4544,000 17,400 The required return on these investments is 11 percent.Required:(a)What is the payback period for each project? (Do notround intermediate calculations. Round your answers to 2 decimalplaces (e.g., 32.16).)Payback period Project Ayears Project Byears (b)What is the NPV for each project? (Do not roundintermediate calculations. Round your answers to 2 decimal places(e.g., 32.16).)Net present value Project A$ Project B$ (c)What is the IRR for each project? (Do not roundintermediate calculations. Enter your answers as a percentagerounded to 2 decimal places (e.g., 32.16).)Internal rate of return Project A% Project B% (d)What is the profitability index for each project? (Donot round intermediate calculations. Round youranswers to 3 decimal places (e.g., 32.161).)Profitability index Project A Project B (e)Based on your answers in (a) through (d), which project willyou finally choose? Assume no capital constraints, so all positiveNPV investments can be funded at the discount rate.(Click to select)Project B? Project A?

Year	Cash Flow (A)	Cash Flow (B)
0	–$429,000	–$42,000
1	42,000	20,800
2	64,000	12,900
3	81,000	20,600
4	544,000	17,400

Required:
(a)	What is the payback period for each project? (Do notround intermediate calculations. Round your answers to 2 decimalplaces (e.g., 32.16).)

(e)	Based on your answers in (a) through (d), which project willyou finally choose? Assume no capital constraints, so all positiveNPV investments can be funded at the discount rate.

	(Click to select)Project B? Project A?