Question
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 $ 57,000
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 $ 57,000 $ 31,800 1 26,800 15,300 2 26,800 15,300 3 26,800 15,300 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.) a-2. If the company applies the profitability index decision rule, which project should the firm accept? multiple choice 1 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.) b-2. If the company applies the NPV decision rule, which project should it take? multiple choice 2 Project II Project I
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