### Comparison of mutually exclusive projects based on

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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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