Consider the following projects:

Cash Flows ($)
Project	C0	C1
D	10,100	20,200
E	20,100	35,175

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.)

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.)

b-2. Which project should you choose?

• Project D

• Project E