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

Year	Cash Flow (I)			Cash Flow (II)
0	$	86,000		$	53,000
1		35,900			12,000
2		46,000			33,500
3		26,000			27,500

a. If the required return is 10 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 10 percent and the company applies the profitability index decision rule, which project should the firm accept?

(Click to select)Project IIProject I

b. If the required return is 10 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?