21. Lion Construction, Inc. (LCI) is considering the following 3 mutually exclusive projects. Projected cash flows for these ventures are as follows: Plan A Plan B Plan C Initial Outlay = $3,600,000 Initial Outlay = $6,000,000 Initial Outlay = $3,500,000 Cash Flow: Cash Flow: Cash Flow: Yr l = $-0- Yr 1 = $4,000,000 Yr 1 = $2,000,000 Yr 2 = -0- Yr 2= 3,000,000 Yr 3 = -0- Yr 3 = 2,000,000 Yr 3 = 2,000,000 Yr 4= -0- Yr 4= -0- Yr 4 = 2,000,000 Yr 5 = $7,000,000 Yr 5= -0- Yr 5 = 2,000,000 Yr 2 = -0- If the LCI has a 12% cost of capital, what decision should be made regarding the projects above? a. Accept plan A b. Accept plan B c. Accept plan C d. Accept Plans A, B and C 22. Bremer Technologies, Inc. (BTI) is evaluating a small project with the following forecasted information: After-tax Accounting After-tax Cash Flow Year Profits from Operations 1 $799 $750 2 150 1,000 3 200 1,200 Initial outlay = $1,500 Compute the profitability index if BTI's discount rate is 10%. a. 15.8 b. 1.61 c. 1.81 d. 0.62