McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $464,000, has an expected useful life of12years, a salvage value of zero, and is expected to increase net annual cash flows by $68,100. Project B will cost $342,000, has an expected useful life of12years, a salvage value of zero, and is expected to increase net annual cash flows by $50,900. A discount rate of8% 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. 15.25. 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?

Project A

Project B

Which project should be accepted based on profitability index?

Project B

Project A