Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 342,000 –$ 50,500 1 53,000 24,800 2 73,000 22,800 3 73,000 20,300 4 448,000 15,400 Whichever project you choose, if any, you require a return of 14 percent 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, e.g., 32.16.) a-2 If you apply the payback criterion, which investment will you choose? Project A Project B b-1 What is the discounted payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2 If you apply the discounted payback criterion, which investment will you choose? Project A Project B c-1 What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c-2 If you apply the NPV criterion, which investment will you choose? Project A Project B d-1 What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d-2 If you apply the IRR criterion, which investment will you choose? Project A Project B e-1 What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e-2 If you apply the profitability index criterion, which investment will you choose? Project A Project B f. Based on your answers in (a) through (e), which project will you finally choose

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 2CMA: Staten Corporation is considering two mutually exclusive projects. Both require an initial outlay of...

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can you please answer from question e and f and below because an expert already answered previous one thank you

Consider the following two mutually exclusive projects:

Year	Cash Flow (A)		Cash Flow (B)
0	–$	342,000		–$	50,500
1		53,000			24,800
2		73,000			22,800
3		73,000			20,300
4		448,000			15,400

Whichever project you choose, if any, you require a return of 14 percent 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, e.g., 32.16.)

a-2	If you apply the payback criterion, which investment will you choose?

	Project A Project B

b-1

What is the discounted payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

b-2	If you apply the discounted payback criterion, which investment will you choose?

	Project A Project B

c-1

What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

c-2	If you apply the NPV criterion, which investment will you choose?

	Project A Project B

d-1

What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

d-2	If you apply the IRR criterion, which investment will you choose?

	Project A Project B

e-1

What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)

e-2	If you apply the profitability index criterion, which investment will you choose?

	Project A Project B


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

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