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Problems with Profitability Index The Moby Computer Corporation is trying to choose between the following mutually exclusive design projects using a required return of 9%:
Problems with Profitability Index
The Moby Computer Corporation is trying to choose between the following mutually exclusive design projects using a required return of 9%:
Year | Cashflow (I) | Cashflow (II) |
0 | -1000000 | -10000 |
1 | 410000 | 6800 |
2 | 410000 | 6800 |
3 | 410000 | 6800 |
The PI for Project I is_____.
The PI for Project II is______.
The NPV for Project I is $_______.
The NPV for Project II is $_______.
Using the PI decision rule, I would chose project___.
Using the NPV decision rule, I would chose project____.
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