Question
Consider the following projects: Cash Flows ($) Project C 0 C 1 D 10,400 20,800 E 20,400 35,700 Assume that the projects are mutually exclusive
Consider the following projects:
| Cash Flows ($) | ||
| Project | C0 | C1 |
| D | 10,400 | 20,800 |
| E | 20,400 | 35,700 |
Assume that the projects are mutually exclusive and that the opportunity cost of capital is 8%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-2. Which project should you choose? multiple choice
Project D
Project E
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World Finance Since 1914
Authors: Paul Einzig
1st Edition
0415539471, 978-0415539470
