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 $ 155,000 $ 305,000 $ 155,000

1 111,000 202,000 121,000

2 111,000 202,000 91,000

Suppose the relevant discount rate is 9 percent per year.

a. Compute the profitability index for each of the three projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Profitability index

Project A _________

Project B __________

Project C __________

b. Compute the NPV for each of the three projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

NPV

Project A $_________

Project B $_________

Project C $__________

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

a.)Project A

b.)Project B

c.)Project C

d.)Project A, Project B, Project C

e.)Project A, Project B

f.)Project A, Project C

g.)Project B, Project C

d. Suppose these three projects are mutually exclusive.

Which project(s) should Amaro accept based on the profitability index rule?

a.)Project A

b.)Project B

c.)Project C

d.)Project A, Project B, Project C

e.)Project A, Project B

f.)Project A, Project C

g.)Project B, Project C

e. Suppose Amaros budget for these projects is $460,000. The projects are not divisible. Which project(s) should Amaro accept?

a.)Project A

b.)Project B

c.)Project C

d.)Project A, Project B, Project C

e.)Project B, Project C

f.)Project B, Project A

g.)Project A, Project C