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Suppose the following two independent investment opportunities are available to Fitz, Inc. The appropriate discount rate is 8.5 percent. Year WNO Project Alpha -$2,700 1,500
Suppose the following two independent investment opportunities are available to Fitz, Inc. The appropriate discount rate is 8.5 percent. Year WNO Project Alpha -$2,700 1,500 1,300 1,100 Project Beta -$4,100 900 2,600 3,200 2 3 a. Compute the profitability index for each of the two projects. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Profitability Index Project Alpha Project Beta b. Which project(s), if either, should the company accept based on the profitability index rule? Both projects O Neither project O Project Alpha O Project Beta
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