Q# 5 Profitability index. Given the discount rate and the future cash flow of each project listed in the followingtable, use the PI to determine which

projects the company should accept.

What is the PI of projectA?

Cash Flow Project A Project B

Year 0 $-1,800,000 -$2,400,000

Year 1 $100, 000 $1,200,000

Year 2 $300,000 $1,000,000

Year 3 $500,000 $800,000

Year 4 $700,000 $600,000

Year 5 $900,000 $400,000

Discount rate 8% 16%