Yokam Company is considering two alternative projects. Project 1 requires an initial investment of $520,000 and has a present value of cash flows of $2,350,000. Project 2 requires an initial investment of $5 million and has a present value of cash flows of $7 million.

1. Compute the profitability index for each project. Profitability Index Choose Denominator:Profitability Index Choose Numerator: Profitability index Project 1 Project 2 2. Based on the profitability index, which project should the company prefer? Project 1 OProject 2