THIS PROBLEM CONTAINS FOUR QUESTIONS AND EACH QUESTION IS WORTH 4 POINTS.The following cash flows are estimated for two mutually exclusive projects.yearProject A CFProject B CF0-90000-15000013000050000240000500003200004200004000040000QUESTION #1. Based on the Payback rule, NEITHER PROJECT A OI would be selected.QUESTION #2. Based on the Internal rate of return (IRR) rule, choose your answer...QUESTION #3. Based on the Net Present Value (NPV) rule, choose your answer...9.45%.QUESTION #4. Based on the Profitability Index (PI) rule, choose your answer...would be selected.✓ would be selected if the discount rate was higher than 6.28% but lower thanwould be selected if the discount rate was 6%.

Step 1:1. To determine which project to select based on the payback rule, we need to calculate the…

Answered: THIS PROBLEM CONTAINS FOUR QUESTIONS…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 13P

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