In: Finance
Consider the following two mutually exclusive projects: |
Year | Cash Flow (A) | Cash Flow (B) |
0 | –$215,423 | –$14,619 |
1 | 27,000 | 4,132 |
2 | 57,000 | 8,376 |
3 | 55,000 | 13,476 |
4 | 420,000 | 8,561 |
Whichever project you choose, if any, you require a 6 percent return on your investment. |
a. What is the payback period for Project A? |
b. What is the payback period for Project B? |
c. What is the discounted payback period for Project A? |
d. What is the discounted payback period for Project B? |
e. What is the NPV for Project A? |
f. What is the NPV for Project B ? |
g. What is the IRR for Project A? |
h. What is the IRR for Project B? |
i. What is the profitability index for Project A? |
j. What is the profitability index for Project B? |