The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 $80,000 $38,000 1 31,000 13,000 2 40,000 27,500 3 46,000 21,500

Requirement 1: (a) If the required return is 14 percent, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).) Profitability index Project I Project II (b) If the required return is 14 percent and the company applies the profitability index decision rule, which project should the firm accept? Requirement 2: (a) If the required return is 14 percent, what is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Net present value Project I $ Project II $ (b) If the company applies the NPV decision rule, which project should it take?