Assume two mutually exclusive investments have the following cash flows:
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Project
|
Year 0
|
Year 1
|
Year 2
|
Year 3
|
|
Project A
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-$200
|
$100
|
$100
|
$100
|
|
Project B
|
-$300
|
$150
|
$125
|
$150
|
|
|
|
|
|
Complete the following table assuming that the cost of capital is 10%: SHOW ALL WORK!
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Project A
|
Project B
|
Under this Investment Criteria which project would you choose? (Enter A or B)
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NPV
|
|
|
|
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IRR
|
|
|
|
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Payback
|
|
|
|
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MIRR
|
|
|
|
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Profitability Index
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|
|
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Based on your answers in the table above, which project would you finally choose and why? Be sure to show your work.