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

Year	Cash Flow (I)			Cash Flow (II)
0	$	84,000		$	42,000
1		33,900			12,600
2		44,000			31,500
3		50,000			25,500

a. If the required return is 17 percent, what is the profitability index for each project?

	Profitability index
Project I		___________________
Project II		___________________

If the required return is 17 percent and the company applies the profitability index decision rule, which project should the firm accept? Project I OR Project II

b. If the required return is 17 percent, what is the NPV for each project?

	Net present value
Project I	_______________$
Project II	_______________$

If the company applies the NPV decision rule, which project should it take? Project I OR Project II