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 $ 185,000 $ 335,000 $ 185,000 1 115,000 202,000 130,000 2 115,000 202,000 95,000

Suppose the relevant discount rate is 10 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 $520,000. 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