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Quattro,Inc The Payback for Project a Is ____ While the Payback

Question 109

Multiple Choice

Quattro,Inc.has the following mutually exclusive projects available.The company has historically used a four-year cutoff for projects.The required return is 11 percent.  Year  Cash Flow  Cash (A)  Flow (B) 0$75,000$85,00016,20027,70029,40026,500328,10024,200432,60015,600\begin{array} { | r | r | r | } \hline \underline { \text { Year } } & \underline { \text { Cash Flow } } & \underline { \text { Cash } } \\ & \underline { ( A ) } & \underline { \text { Flow } ( \mathrm { B } ) } \\\hline 0 & - \$ 75,000 & - \$ 85,000 \\\hline 1 & 6,200 & 27,700 \\\hline 2 & 9,400 & 26,500 \\\hline 3 & 28,100 & 24,200 \\\hline 4 & 32,600 & 15,600 \\\hline\end{array} The payback for Project A is ____ while the payback for Project B is ____.The NPV for Project A is _____ while the NPV for Project B is ____.Which project,if any,should the company accept?


A) 3.92 years; 3.64 years; $780.85; $1,211.48; accept both Projects
B) 3.92 years; 3.79 years; -$17,108.60; $1,211.48; accept Project B only
C) 3.96 years; 3.42 years; -$19,764.06; -$10,566.02; reject both projects
D) 3.96 years; 3.42 years; $17,780.85; -$1,211.48; accept Project A only
E) 4.06 years; 3.79 years; $211.60; -$7,945.93; accept Project A only

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