1.

Rosewill Inc., is contemplating an electric Food Drying project which is expected to last for 8 years. Using the profitability index rule, what is the lowest annuity cash flow necessary to approve the Food Drying project if it involves an outlay of $93,700 today? Note: Rosewills required return is 9.5%.

Multiple Choice

• $18,812.81

• $20,380.54

• $17,245.07

• $15,918.53

• $11,712.50

2.

SUVs:

Year	Project MDX			Project RX
0	$539,400			$510,000
1	219,900			209,600
2	229,800			219,400
3	237,000			227,300
4	196,700			188,100

The cashflows for two different SUVs (2022 Acura MDX vs. 2021 Lexus RX) projects are provided in the table above. Based on this information, their crossover rate is:

Multiple Choice

• 23.47%

• 24.05%

• 14.03%

• 12.76%

• .59%