is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $$430,000,$ has an expected useful life of $11$ years, a salvage value of zero, and is expected to increase net annual cash flows by $$70,500.$ Project B will cost $$265,000,$ has an expected useful life of $11$ years, a salvage value of zero, and is expected to increase net annual cash flows by $$45,000.$ A discount rate of $9\%$ is appropriate for both projects. Click here to view PV table.

Compute the net present value and profitability index of each project. $($If the net present value is negative, use either a negative sign preceding the number eg $-45$ or parentheses eg $(45).$ Round present value answers to $0$ decimal places, e$.$g$.125$ and profitability index answers to $2$ decimal places, e$.$g$.15\mathrm{.}25.$ For calculation purposes, use $5$ decimal places as displayed in the factor table provided.$)$

Net present value $-$ Project A $

Profitability index $-$ Project A

Net present value $-$ Project B

$

Profitability index $-$ Project B

Which project should be accepted based on Net Present Value?

should be accepted.

Which project should be accepted based on profitability index?

should be accepted.