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The Whenworth Corporation is trying to choose between the following two mutually exclusive design projects: Year 0 1 2 3 Cash Flow () Cash Flow
The Whenworth Corporation is trying to choose between the following two mutually exclusive design projects: Year 0 1 2 3 Cash Flow () Cash Flow (1) -$85,000 --$51,000 34,900 12,300 45,000 32,500 28,000 23,500 a-1. If the required return is 10 percent, what is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) a-2. If the company applies the profitability index decision rule, which project should it take? b-1. If the required return is 10 percent, what is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2. If the company applies the net present value decision rule, which project should it take? a-1. Project Project II a-2. b-1. Project 1 Project II b-2
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