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

Year	Cash Flow (I)			Cash Flow (II)
0	$	88,000		$	56,000
1		37,900			11,400
2		48,000			35,500
3		28,000			29,500

a. If the required return is 11 percent, what is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)

	Profitability index
Project I	???
Project II	???

If the required return is 11 percent and the company applies the profitability index decision rule, which project should the firm accept? (Project 1 or Project 2???)

b. If the required return is 11 percent, what is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	Net present value
Project I	???$
Project II	???$

If the company applies the NPV decision rule, which project should it take? (Project 1 or Project 2???)