0 359,000 45,500 36,000 23,100 21,100 18,600 3,700 56,000 56,000 431,000 Whichev
ID: 2523477 • Letter: 0
Question
0 359,000 45,500 36,000 23,100 21,100 18,600 3,700 56,000 56,000 431,000 Whichever project you choose, if any, you require a 14 percent return on your investment a-1 What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, o.g, 32.16.) 3.49 years 207 years a-2 If you apply the payback criterion, which investment will you choose? Project A Project B OProject A Project B b-1 What is the discounted payback perlod for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g, 32.16.) Project A Projoct B 3.97 years 2.72 years b-2 if you apply the discounted payback criterion, which investment will you choose? Project A OOProject B -1 What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 docimal places,e.g 32.16) Project A 8,654 o 665 0 s MacBook Air 20 3 2 3 4 5Explanation / Answer
Profitability index = PV of cash inflow/ initial cash outflow
PIA = (359000 + 8654)/ 359000
= 1.02
PIB = (45500 + 11665)/ 45500
= 1.26
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