# Comparing Mutually Exclusive Project Investment Criteria

Consider the following two mutually exclusive project:

Year Cash Flow (A) Cash Flow (B)

0 -$322,574 -$23,426

1 29,000 9,699

2 54,000 8,919

3 55,000 13,478

4 395,000 11,486

Whichever project you choose, if any, you require a 15 percent return on your investment.

a) The payback period for projects A and B. (round answers to decimal places, e.g. 32.16)

b) The discounted payback period for A and B. (round answers to decimal places, e.g. 32.16)

c) The NPV for projects A and B. (round answers to decimal places, e.g. 32.16)

d) The IRR for projects A and B. (round answers to decimal places, e.g. 32.16)

e) The profitability index for projects A and B. (round answers to decimal places, e.g. 32.161)

f) Based on your answers in (a) through (e) which project will you finally choose?

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#### Solution Summary

This solution calculates values for each project as requested in each question. The Solution is provided in a Microsoft Excel document.