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Problem 1 2 - 2 5 You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate of 1 2
Problem
You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate of percent. Use Appendix B
Project X DVDs
of the Weather Reports
$ Investment
Project Y SlowMotion
Replays of Commercials
$ Investment
Year Cash Flow Year Cash Flow
$ $
a Calculate the profitability index for project XRound PV Factor" to decimal places. Round the final answer to decimal places.
PI
b Calculate the profitability index for project YRound PV Factor" to decimal places. Round the final answer to decimal places.
PI
c Using the NPV method combined with the PI approach, which project would you select? Use a discount rate of percent.
multiple choice
Project Y
Project X
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