I. VDSL Company has two mutually exclusive projects. Below is atable representing the initial investment and cash flows for theseprojects over four (4) years.
Project A Project B Year Cash Flow Cash Flow $ $ 0 -750,000-750,000 1 250,000 200,000 2 350,000 400,000 3 250,000 100,000 4200,000 175,000 If the company wishes to recover the investment in2.5 years, calculate the payback period of each project anddetermine which project is the best investment.
