symons Sausage Corporation is trying to choose between the following two mutually exclusive design projects:

Year	Cash Flow (I)				Cash Flow (II)
0	$	65,000			$	49,800
1		31,500				24,900
2		31,500				24,900
3		31,500				24,900

a)	If the required return is 10 percent and the company applies the profitability index decision rule, which project should the firm except?

b) If the ocmpany applies the NPV decision rule, which project should it take?

c) Explain why your answers in parts (a) and (b) are different.