Two investment projects which are mutually exclusive both require a $10,000,0000 investment. Projected cash flows are:
Year Project A Project B
1 $3,500,000 $6,500,000
2 $3,500,000 3,000,000
3 $3,500,000 3,000,000
4 $3,500,000 1,000,000
If your discount rate is 12 percent, calculate payback, net present value and profitability index for each project.