1. What is the Profitability Index of a project that costs $21,000 today and is expected to generate annual cash inflows of $5,000 for the following 6 years. Use discount rate of 10%. Round to two decimal places.
2. What is the NPV of a project that costs $10,000 today and another $9,000 in one year, and is then expected to generate 8 annual cash inflows of $4,000 starting at the end of year 3. Use discount rate of 13%. Round to the nearest cent. [Hint: There are two outflows here, today and year 1. You will need to discount the year 1 cost at the project's discount rate when calculating PV(outflows).]