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Refer to two projects with the following cash flows: Year Project A Project B 0 -$170 -$170 1 75 90 2 75 90 3 75
Refer to two projects with the following cash flows:
Year | Project A | Project B | ||||||
0 | -$170 | -$170 | ||||||
1 | 75 | 90 | ||||||
2 | 75 | 90 | ||||||
3 | 75 | 90 | ||||||
4 | 75 | |||||||
If the opportunity cost of capital is 10%, what is the profitability index for each project? (Round your answers to 4 decimal places.)
Does the profitability index rank the projects A and B correctly? |
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