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Profitability index - Given the discount rate and the future cash flow of each project listed in the following table, use the PI to determine

Profitability index - Given the discount rate and the future cash flow of each project listed in the following table, use the PI to determine which projects the company should accept.

Cash Flow

Project U

Project V

Year 0

(negative)-$2,000,000

(negative)-$2,600,000

Year 1

$500,000

$1,300,000

Year 2

$500,000

$1,100,000

Year 3

$500,000

$900,000

Year 4

$500,000

$700,000

Year 5

$500,000

$500,000

Discount rate

6%

12%

What is the PI of Project U? Project V?

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