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The Angry Bird Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 $

The Angry Bird Corporation is trying to choose between the following two mutually exclusive design projects:

Year Cash Flow (I) Cash Flow (II)
0 $ 64,000 $ 18,000
1 31,000 9,700
2 31,000 9,700
3 31,000 9,700

a-1

If the required return is 10 percent, what is the profitability index for both projects? (Round your answers to 3 decimal places. (e.g., 32.161))

Profitability Index
Project I
Project II

a-2

If the company applies the profitability index decision rule, which project should the firm accept?

Project I
Project II

b-1 What is the NPV for both projects? (Round your answers to 2 decimal places. (e.g., 32.16))

NPV
Project I $
Project II $

b-2

If the company applies the NPV decision rule, which project should it take?

Project I
Project II

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