17. NPV and Profitability Index. Humboldt Manufacturing has the following two possible projects. The required return is 12 percent. Year Project Project Z -$35,000 $60,000 16,000 25,000 2 13,000 24,000 15,000 22,000 11,000 21,000 0 1 3 4 2. What is the profitability index for each project? b. What is the NPV for each project? c. Which, if either of the projects should the company accept? 18. Crossover Point. Paradise Enterprises has gathered projected cash flows for two projects. At what interest rate would the company be indifferent between the two projects? Which project is better if the required return is above this interest rate? Why? 32 Year 0 23 % 1 Project ! -$150,000 65,000 52,000 49,000 43,000 Project J -$150,000 41,000 48,000 64,000 63,000 better, Ais 2 3 4 19. Payback Period and IRR. Suppose you have a project with a payback period exactly equal to the life of the project. What do you know about the IRR of the project? Suppose that the payback period is never. What do you know about the IRR of the project now? 20. NPV and Discount Rates. An investment has an installed cost of $487.160. The cash flows over the four-year life of the investment are projected to be $170,605, $189,895, $150,387, and $135,867. If the discount rate is zero, what is the NPV? If the discount rate is infinite, what is the NPV? At what discount rate is the NPV just equal to zero? Sketch the NPV profile for this investment based on these three points