Use the following information for problems 1 to 5. Assume that the projects are mutually exclusive. Year Cash...

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Finance

Use the following information for problems 1 to 5. Assume thatthe projects are mutually exclusive.
Year
Cash Flow (A)
Cash Flow (B)
0
-$37,500
-$37,500
1
$17,300
$5,700
2
$16,200
$12,900
3
$13,800
$16,300
4
$7,600
$27,500
1.         What is the IRRfor each of these projects? Using the IRR decision rule, whichproject should the company accept? Is this decision necessarilycorrect?
2.         If the requiredreturn is 11 percent, what is the NPV for each of these projects?Which project will the company choose if it applies the NPVdecision rule?
3.         Over whatrange of discount rates would the company choose Project A? ProjectB? At what discount rate would the company be indifferent betweenthese two projects? Explain.
4.         Compute thepayback period for each project.
           5.         Compute theprofitability index for each project.

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Use the following information for problems 1 to 5. Assume thatthe projects are mutually exclusive.YearCash Flow (A)Cash Flow (B)0-$37,500-$37,5001$17,300$5,7002$16,200$12,9003$13,800$16,3004$7,600$27,5001. What is the IRRfor each of these projects? Using the IRR decision rule, whichproject should the company accept? Is this decision necessarilycorrect?2. If the requiredreturn is 11 percent, what is the NPV for each of these projects?Which project will the company choose if it applies the NPVdecision rule?3. Over whatrange of discount rates would the company choose Project A? ProjectB? At what discount rate would the company be indifferent betweenthese two projects? Explain.4. Compute thepayback period for each project. 5. Compute theprofitability index for each project.

Year	Cash Flow (A)	Cash Flow (B)
0	-$37,500	-$37,500
1	$17,300	$5,700
2	$16,200	$12,900
3	$13,800	$16,300
4	$7,600	$27,500