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The following are the cash flows of two projects: Year Project A Project B 0 -$330 -$330 1 160 230 2 160 230 3 160

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The following are the cash flows of two projects: Year Project A Project B 0 -$330 -$330 1 160 230 2 160 230 3 160 230 4 160 a. If the opportunity cost of capital is 12%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.) Profitability Index Project A B b. Does the profitability index rank the projects correctly? Yes O No

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