1. Irwin Industries is currently considering a project that will produce cash inflows of $81,000 a year for two years followed by $79,000 a year for three more years. The cost of the project is $269,000. What is the profitability index if the discount rate is 9.3 percent?

2. Setesh of Kanaan's new pyramid project has expected cash inflows, starting with year 1, of $2,900, $4,000, $5,700 and finally in year four, $7,400. The profitability index is 1.49 and the discount rate is 10.6 percent. What is the initial cost of the project?

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