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Suppose the following two independent investment opportunities are available to Scott, Inc. The appropriate discount rate is 8 percent. Year Project Alpha Project Beta 0
| Suppose the following two independent investment opportunities are available to Scott, Inc. The appropriate discount rate is 8 percent. |
| Year | Project Alpha | Project Beta |
| 0 | $5,500 | $7,100 |
| 1 | 2,800 | 1,600 |
| 2 | 2,700 | 5,500 |
| 3 | 1,700 | 4,500 |
| Compute the profitability index for each of the two projects. (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).) |
| Profitability Index | |
| Project Alpha | |
| Project Beta | |
| Which project(s) should the company accept based on the profitability index rule? | ||||||||
|
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