Question
The Sloan Corporation is trying to choose between the following two mutually exclusive design projects: YearCash Flow (I)Cash Flow (II)0-$74,000-$17,000134,0009,200234,0009,200334,0009,200 a-1 If the required return
The Sloan Corporation is trying to choose between the following two mutually exclusive design projects:
YearCash Flow
(I)Cash Flow
(II)0-$74,000-$17,000134,0009,200234,0009,200334,0009,200
a-1If the required return is 12 percent, what is the profitability index for both projects?(Do not round intermediate calculations. Round your answers to 3 decimal places, e.g., 32.161.)
Profitability
IndexProject IProject II
a-2If the company applies the profitability index decision rule, which project should the firm accept?
Project IProject Il
b-1What is the NPV for both projects?(Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
NPVProject I$Project II$
b-2If the company applies the NPV decision rule, which project should it take?
Project IProject II
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