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Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 –$ 416,000 –$ 35,500
1 48,500 19,500
2 57,500 14,200
3 74,500 14,100
4 531,000 10,900

The required return on these investments is 12 percent.

a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Payback period
Project A years
Project B years

b. What is the NPV for each project? (Do not round intermediate calculations and 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 round intermediate calculations and enter your answers as a percent rounded 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? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)

Profitability index
Project A
Project B

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Tod Thiel
Tod ThielLv2
28 Sep 2019
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