Consider projects A and B with the following cash flows:

C0 C1 C2 C3

A $ 37 + $ 21 + $ 21 $ 21

B 62 31 31 31

a-1. What is the NPV of each project if the discount rate is 12%?

a-2. Which project has the higher NPV?

b-1. What is the profitability index of each project? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-2. Which project has the higher profitability index?

c-1. Which project is most attractive to a firm that can raise an unlimited amount of funds to pay for its investment projects?

c-2. Which project is most attractive to a firm that is limited in the funds it can raise?