1.A company projects an increase in net income of $153000 each year for the next five years if it invests $900000 in new equipment. The equipment has a 5-year life and an estimated salvage value of $300000. What is the annual rate of return on this investment?

30.0%

17.0%

33.1%

25.5%

2.Bramble Inc. is comparing several alternative capital budgeting projects as shown below:

ProjectsABCInitial investment$86000$126000$166000Present value of net cash flows96000116000206000

Using the profitability index, how many of the projects are acceptable?

0

2

1

3