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10.43 You are analyzing two proposed capital investments with the following cash flows: Year Project X Project Y 0 - $20,000 7270 1 13,030 7270

10.43

You are analyzing two proposed capital investments with the following cash flows:

Year Project X Project Y

0 - $20,000 7270

1 13,030 7270

2 6,360 7270

3 5,860 7270

4 2,020 7270

The cost of capital for both projects is 10 percent.

Calculate the profitability index (PI) for each project. (Do not round discount factors. Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answer to 4 decimal places, e.g. 1.2527.)

The PI for project X is

and the PI for project Y is

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