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The Simpson Corporation is trying to choose between the following two mutually exclusive design projects: Year 0 Cash Flow (1) Cash Flow (II) 123
The Simpson Corporation is trying to choose between the following two mutually exclusive design projects: Year 0 Cash Flow (1) Cash Flow (II) 123 -$66,000 -$ 17,800 29,000 9,600 29,000 29,000 9,600 9,600 a-1. If the required return for both projects is 10 percent, what is the profitability index for both projects? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) a- If the company applies the profitability index decision rule, which project should the 2. firm accept? b-1.What is the NPV for both projects? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b- If the company applies the NPV decision rule, which project should it choose? 2. a-1. Project I profitability index Project II profitability index a-2. Profitability index decision b-1. Project | NPV Project II NPV b-2. NPV decision
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