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Dehlia Manufacturing has the following two possible projects. The required return is 12 percent. Year Project Y Project Z 0 ($31,000) ($60,000) Req Return 12%
| Dehlia Manufacturing has the following two possible projects. The required return is 12 percent. | ||||||||
| Year | Project Y | Project Z | ||||||
| 0 | ($31,000) | ($60,000) | Req Return | 12% | ||||
| 1 | $14,000 | $24,000 | ||||||
| 2 | $12,400 | $23,000 | ||||||
| 3 | $14,800 | $22,000 | ||||||
| 4 | $10,400 | $21,000 | ||||||
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a.What is the profitability index for each project?
b. What is the NPV for each project?
c.Which, if either, of the projects should the company accept?
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