Use the table for the question below. Consider the following two projects with cash flows in $: Year 0 Year 1 Year 2 Yea

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Use The Table For The Question Below Consider The Following Two Projects With Cash Flows In Year 0 Year 1 Year 2 Yea 1 (103 KiB) Viewed 73 times

Use the table for the question below. Consider the following two projects with cash flows in $: Year 0 Year 1 Year 2 Year 3 Year 4 Project Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow A -100 40 50 60 N/A B -73 30 30 30 30 Discount Rate .15 .15 18) The payback period for project B is closest to: A) 2.5 years. B) 2.0 years. C) 2.2 years. D) 2.4 years. 19) You are trying to decide between three mutually exclusive investment opportunities. The most appropriate tool for identifying the correct decision is: A) NPV. B) profitability index. C) IRR. D) incremental IRR. 20) Which of the following statements is FALSE? A) If there is a fixed supply of a resource available, you should rank projects by the profitability index, selecting the project with the lowest profitability index first and working your way down the list until the resource is consumed. B) Practitioners often use the profitability index to identify the optimal combination of projects when there is a fixed supply of resources. C) If there is a fixed supply of resources available, so that you cannot undertake all possible opportunities, then simply picking the highest NPV opportunity might not lead to the best decision. D) The profitability index is calculated as the NPV divided by the resources consumed by the project.