The treasurer of Amaro Canned Fruits Inc. has projected the cash flows of projects A, B, and C as follows:

Year	Project A		Project B		Project C
0	$	150,000	$	300,000	$	150,000
1		110,000		200,000		120,000
2		110,000		200,000		90,000

Suppose the relevant discount rate is 12 percent a year.

a. Compute the PI for each of the three projects. (Do not round intermediate calculations. Round the answers to 2 decimal places.)

	Profitability Index
Project A
Project B
Project C

b. Compute the NPV for each of the three projects. (Do not round intermediate calculations. Round the answers to 2 decimal places. Omit $ sign in your response.)

	NPV
Project A	$
Project B	$
Project C	$

c. Suppose these three projects are independent. Which project(s) should Amaro accept based on the PI rule?

multiple choice 1

• Project A

• Project B

• Project C

• Project A, Project B, Project C

• Project A, Project B

• Project A, Project C

• Project B, Project C

d. Suppose these three projects are mutually exclusive. Which project(s) should Amaro accept based on the PI rule?

multiple choice 2

• Project A

• Project B

• Project C

• Project A, Project B, Project C

• Project A, Project B

• Project A, Project C

• Project B, Project C

e. Suppose Amaros budget for these projects is $450,000. The projects are not divisible. Which project(s) should Amaro accept?

multiple choice 3

• Project A

• Project B

• Project C

• Project A, Project B, Project C

• Project B, Project C

• Project B, Project A

• Project A, Project C