Suppose the following two independent investment opportunities are available to Relax, Inc. The appropriate discount rate is 10 percent.

Year Project Alpha Project Beta

0 $5,900 $7,500

1 3,000 1,700

2 2,900 5,900

3 1,800 4,700

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 =

Profitability Index Project Beta =

b. Which project should the company accept based on the profitability index rule?