Comparison of Mutually Exclusive Projects based on EAC.

**Comparing investment criteria**

Consider the following two mutually exclusive projects:

Year |
Cash flow (A) |
Cash flow (B) |

0 |
-$262,782 |
-$27,554 |

1 |
27,300 |
10,410 |

2 |
51,000 |
11,010 |

3 |
51,000 |
10,196 |

4 |
393,000 |
10,971 |

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

*Required:*

**(a) **The payback period for project A and B is _____ and _____ years, respectively. (Round your answers to 2 decimal places, e.g. 32.16)

**(b) **The discounted payback period for project A and B is _____ and _____ years, respectively. (Round your answers to 2 decimal places, e.g. 32.16)

**(c) **The NPV for project A and B is $_____ and $_____, respectively. (Round your answers to 2 decimal places, e.g. 32.16)

**(d)** The IRR for project A and B is _____ percent and _____ percent, respectively. (Do not include the percent sign (%). Round your answers to 2 decimal places, e.g. 32.16)

**(e)** The profitability index for project A and B is _____ and _____, respectively. (Round your answers to 3 decimal places, e.g. 32.161)

**(f) **Based on your answers in (a) through (e), you will finally choose Project _____.

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