Shamrock Company is considering two different, mutually exclusive capital expenditure

proposals. Project A will cost $$485,000,$ has an expected useful life of $12$ years and a salvage value

of zero, and is expected to increase net annual cash flows by $$75,000.$ Project B will cost

$$272,000,$ has an expected useful life of $12$ years and a salvage value of zero, and is expected to

increase net annual cash flows by $$45,000.$ A discount rate of $9\%$ is appropriate for both projects.

Click here to view the factor table.

Calculate the net present value and profitability index of each project. $($If the net present value is

negative, use either a negative sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).$ Round present

value answersto $0$ decimal places, e$.$g$.125$ and profitability index answersto $2$ decimal places, e$.$g$.$

$15\mathrm{.}52.$ For calculation purposes, use $5$ decimal places as displayed in the factor table provided, e$.$g$.$

$1\mathrm{.}25124.)$

Project A Project B

Net present value $ $

Profitability index

Which project should be accepted based on net present value?

should be accepted.

Which project should be accepted based on profitability index?

should be accepted.