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The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 $85,000 $51,000
The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects: |
Year | Cash Flow (I) | Cash Flow (II) |
0 | $85,000 | $51,000 |
1 | 34,900 | 12,300 |
2 | 45,000 | 32,500 |
3 | 28,000 | 26,500 |
Requirement 1: | |
(a) | If the required return is 10 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).) |
|
Requirement 2: | |
(a) | If the required return is 10 percent, what is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
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