Your task is to analyze two mutually exclusive projects:
Year Cash Flow Project X Cash Flow Project Z
-0- -400,000 -50,000
1 25,000 20,000
2 60,000 15,000
3 60,000 20,000
4 540,000 20,000
Whichever project you chose, if any, you require a 15% return on your investment.
A] Using the payback criterion, explain which investment should you chose?
B] Using the discounted payback criterion, explain which investment should you chose?
C] Using the NPV criterion, explain which investment should you chose?
D] Using the IRR criterion, explain which investment should you chose?
E] Using the profitability index criterion, explain which investment should you chose?
F] Based on your analysis in (A) thru (E), explain which investment should you finally chose?