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The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (D) Cash Flow (II) -$75,000 28,500 35,000
The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (D) Cash Flow (II) -$75,000 28,500 35,000 41,000 -$33,000 10,500 22,500 16,500 Requirement 1: (a) If the required return is 13 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 Projectl Project ll (b) If the required return is 13 percent and the company applies the profitability index decision rule which project should the firm accept? Click to select) Requirement 2: (a) If the required return is 13 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 t value Project l Project ll (b) If the company applies the NPV decision rule, which project should it take? Click to select)
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