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The following are the cash flows of two projects: Year Project A Project B 0 $ 250 $ 250 1 130 150 2 130 150
The following are the cash flows of two projects: |
Year | Project A | Project B | |||||||||
0 | $ | 250 | $ | 250 | |||||||
1 | 130 | 150 | |||||||||
2 | 130 | 150 | |||||||||
3 | 130 | 150 | |||||||||
4 | 130 | ||||||||||
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If the opportunity cost of capital is 10%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.) |
Project | Profitability index |
A | |
B | |
|
Is the project with the highest profitability index also the one with the highest NPV? | ||||
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