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You are analyzing two proposed capital investments with the following cash flows: Year Project X Project Y 0 - $20,000 - $20,000 1 13,630 7,470
You are analyzing two proposed capital investments with the following cash flows: Year Project X Project Y 0 - $20,000 - $20,000
1 13,630 7,470
2 5,460 7,470
3 5,660 7,470
4 1,920 7,470
The cost of capital for both projects is 10 percent.
Calculate the profitability index (PI) for each project. (Do not round discount factors. Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answer to 4 decimal places, e.g. 1.2527.)
Project x is____ and project y is____
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