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Refer to two projects with the following cash flows: Year Project A Project B 0 -$120 -$120 1 50 60 2 50 60 3 50
Refer to two projects with the following cash
flows:
Year Project A Project B
0 -$120 -$120
1 50 60
2 50 60
3 50 60
5 50
If the opportunity cost of capital is 10%, what is
the profitability index for each project? Round to
4 decimal places.)
Does the profitability index rank the projects A and
B correctly?
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