YEAR 0 1 O Cash Flow (A) -$455,000 $58,000 $85,000 $85,000 $572,000 Cash Flow (B) -$65,000 $31,000 $28,000 $25,500 $19,0
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YEAR 0 1 O Cash Flow (A) -$455,000 $58,000 $85,000 $85,000 $572,000 Cash Flow (B) -$65,000 $31,000 $28,000 $25,500 $19,0
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YEAR 0 1 O Cash Flow (A) -$455,000 $58,000 $85,000 $85,000 $572,000 Cash Flow (B) -$65,000 $31,000 $28,000 $25,500 $19,000 N 2 3 4 Whichever project you choose, if any, you require a return of 11 percent on your investment. a. If you apply the payback criterion, which investment will you choose? Why? b. If you apply the NPV criterion, which investment will you choose? Why? If you apply the IFF criterion, which investment will you choose? Why? d. Based on your answers in (a) through (c), which project will you finally choose?