Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects:

Year Cash Flow (l) Cash Flow (ll)

0 -$65,000 -$ 17,900

1 30,000 9,650

2 30,000 9,650

3 30,000 9,650

a-1. If the required return is 12 percent, what is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Profitability Index

Project I ____

Project II ______

a-2. If the company applies the profitability index decision rule, which project should the firm accept?

Project I

Project II

b-1. What is the NPV for each project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Project I $ ____

Project II $____

b-2. If the company applies the NPV decision rule, which project should it take?

Project I

Project II