Bass Corporation requires a 10% rate of return for all investments. Management is considering a project that will initially cost $75,000. The company expects to generate $12,000 of revenue in the first year, $25,000 in the second year, and $20,000 for the last two years of the project. Use the table in Exercise 10 to calculate the net present value of the project and determine if the company should make the investment.

Present Value of $1 at Compound Interest

Year 10% 12% 15% 1 0.909 0.893 0.870 2 0.826 0.797 0.756 3 0.751 0.721 0.658 4 0.683 0.636 0.572 5 0.621 0.567 0.497 6 0.564 0.507 0.432 7 0.513 0.452 0.376 8 0.467 0.404 0.327 9 0.424 0.361 0.284 10 0.386 0.322 0.247

Calculate the present value index of Project 1 (information in Exercise 17) for Bass Corporation, rounding answer to two decimal places. If Project 2 has a present value index of 1.15, in which project should the company invest?