In: Finance
Consider the following two mutually exclusive projects: |
Year | Cash Flow (A) | Cash Flow (B) |
0 | –$254,821 | –$15,251 |
1 | 25,000 | 4,842 |
2 | 56,000 | 8,244 |
3 | 57,000 | 13,318 |
4 | 398,000 | 8,508 |
Whichever project you choose, if any, you require a 6 percent return on your investment. |
Required: |
(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? |
(i) | What is the profitability index for Project A? |
(j) | What is the profitability index for Project B? |