Consider the following projects:

Cash Flows ($)
Project	C0	C1
D	10,600	21,200
E	20,600	36,050

Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%.

a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Project	Profitability Index
D
E

b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Profitability-index

b-2. Which project should you choose?

	Project D
	Project E