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The Whenworth Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (1) Cash Flow (1) O -$87,000 -$55,000
The Whenworth Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (1) Cash Flow (1) O -$87,000 -$55,000 36,900 11,700 2 47,000 34,500 3. 27,000 28,500 3 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 | Project II b-2
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