h) Would you expect the NPV and PI methods to give consistent accept/reject decisions? Why or why not?

i) What would happen to the NPV and PI for each project if the required rate of return increased? If the required rate of return decreased?

2) You are tasked to evaluate two capital-budgeting proposals. You have been asked not only to provide a recommendation but also to respond to a number of questions aimed at assessing your understanding of the capital-budgeting process. This is a standard procedure for all new financial analysts at Axelon, and it will serve to determine whether you are moved directly into the capital-budgeting analysis department or are provided with remedial training. Provide an evaluation of two proposed projects, both with 5-year expected lives and identical initial outlays of $110,000. Both of these projects involve additions to Axelon's highly successful product line, and as a result, the required rate of return on both projects has been established at 12 percent. The expected free cash flows from each project are as follows: 40000 40000 2000 30000 40000 40000 50000 40000 70000 40000 - 110000 -110000