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?