Vaughn Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $$508,000,$ has an expected useful life of $14$ years and a salvage value of zero, and is expected to increase net annual cash flows by $$72,000.$ Project. $B$ will cost $$308,000,$ has an expected useful life of $14$ years and a salvage value of zero, and is expected to increase net annual cash flows by $$46,000.$ A discount rate of $9\%$ is appropriate for both projects.

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Calculate the net present value and profitability index of each project. $($If the net present value is negative, use either a negative sign preceding the number e$.$g$.-45$ or parentheses eg$.(45).$ Round present value answers to $0$ decimal places, e$.$s$.125$ and profitability index answers to $2$ decimal places, e$.$g$.15\mathrm{.}52.$ For calculation purposes, use $5$ decimal places as displayed in the factor table provided, e$.$g$.1\mathrm{.}251\mathrm{.}24.)$

Net present value

$ $$

Project B

Profitability index $$

$$

Which project should be accepted based on net present value?

Project $A$ should be accepted.

Which project should be accepted based on profitability index?

should be accepted