FIN 571 Course Great Wisdom / tutorialrank.com FIN 571 Course Great Wisdom / tutorialrank.com | Page 49

7.Maxwell Software, Inc., has the following mutually exclusive
projects.

a-1. Calculate the payback period for each project. (Do not round
intermediate calculations and round your answers to 3 decimal places,
e.g., 32.161.)

Payback period
Project A

1.938 years

Project B

2.063 years

________________________________________

a-2.

Which, if either, of these projects should be chosen?

b-1. What is the NPV for each project if the appropriate discount
rate is 15 percent? (A negative answer should be indicated by a minus
sign. Do not round intermediate calculations and round your answers
to 2 decimal places, e.g., 32.16.)

b-2. Which, if either, of these projects should be chosen if the
appropriate discount rate is 15 percent?