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Problem 8-6 Profitability Index (LO3) The following are the cash flows of two projects: Year 0 1 2. 3 4 Project A -$290 170 170

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Problem 8-6 Profitability Index (LO3) The following are the cash flows of two projects: Year 0 1 2. 3 4 Project A -$290 170 170 170 170 Project B -$290 190 190 190 If the opportunity cost of capital is 11%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.) Project A B Profitability index 1.8187 1.6011 Is the project with the highest profitability index also the one with the highest NPV? O Yes O No

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