Question
Question B1 (17 marks) (a) (6 marks) Green Life Corporation is trying to choose between two mutually exclusive projects. Project A has a 5-year expected
Question B1 (17 marks) (a) (6 marks) Green Life Corporation is trying to choose between two mutually exclusive projects. Project A has a 5-year expected life, an initial cost of $60,000 and a profitability index (PI) of 1.2. Project B has a 7-year expected life, an initial cost of $74,000 and a profitability index (PI) of 1.24. Both projects have conventional cash flows, can be repeated and that there are no anticipated changes in the cash flows. Green Life Corporation required a return of 19% for both investments. What is the companys investment decision?
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