1. Dawntreader Landscaping is considering purchasing $175,000 of new lawn equipment and they anticipate the additional equipment will result in cash flows as below. Their weighted average cost of capital is 8.75%. The profitability index for the project is:

Year	Cash Flow
1	36,000
2	41,000
3	45,000
4	53,000
5	58,000

2. Snowbound Tours is considering investing $5,650,000 in a new lodge on the Tanana River. Management projects 15 years of cash flows per the chart below. Using a discount rate of 9.65%, management should

Year	Cash Flow	Year	Cash Flow
1	260,000	9	980,000
2	340,000	10	965,000
3	505,000	11	920,000
4	610,000	12	890,000
5	790,000	13	840,000
6	1,200,000	14	720,000
7	1,295,000	15	690,000
8	1,110,000

[A] Accept the project

[B] Reject the project

[C] Be indifferent to the project