Which of these two projects should be chosen

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Reference no: EM132819084

Question - In a Microsoft Word document or an Excel spreadsheet, submit the answers to the following:

1. Tri Star Inc. has the following mutually exclusive projects:

Year

Project A

Project B

0

-14,500

9,800

1

8,500

4,700

2

6,800

4,200

3

2,800

4,100

a. Suppose the company's payback period cut-off is two years. Which of these two projects should be chosen?

b. Suppose the company uses the NPV rule to rank these two projects. Which project should be chosen if the appropriate discount rate is 15 percent?

Reference no: EM132819084

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