17. Comparing Investment Criteria Lo1, 92, 93, 5, 7] Consider the following two mutually exclusive projects: Year Cash F

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17 Comparing Investment Criteria Lo1 92 93 5 7 Consider The Following Two Mutually Exclusive Projects Year Cash F 1 (70.36 KiB) Viewed 170 times

17. Comparing Investment Criteria Lo1, 92, 93, 5, 7] Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 1 2 3 4 -$291,000 37,000 55,000 55,000 366,000 -$41,600 20,000 17,600 17,200 14,000 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 discounted payback criterion, which investment will you choose? Why? c. If you apply the NPV criterion, which investment will you choose? Why? d. If you apply the IRR criterion, which investment will you choose? Why? e. If you apply the profitability index criterion, which investment will you choose? Why?