Kaleb Konstruction, Inc., has the following mutually exclusive projects, A and B, available. The estimated life for both projects are four year. The estimated initial investment costs and the cash flows from assets produced by each project over the project life are presented in the following table. The unit of the numbers in the table is $ in millions. The required return for both projects is 14 percent.

Year	Project A	Project B
0	-125,000	-200,000
1	52,550	42,500
2	45,000	42,500
3	45,000	110,500
4	45,000	116,500

What is the Profitability Index for each project?

(No unit for the profitability index.)

	Profitability Index
Project A
Project B

Reqirement

According to your analysis, which project, if any, should the company accept?

(Fill in this cell with "1" or "2". If your choice is Project A, then fill in with "1". If your choice is Project B, then fill in with "2".)

Project

Reqirement

At what discount rate do these two projects have the same net present value?

Discount Rate %