You are analyzing two proposed capital investments with the following cash flows:

Year

$1$

$2$

$3$

$4$

Project X

$-$ $$20\mathrm{.}000$

$13\mathrm{.}630$

$5,660$

$5,660$

$1,820$

Project Y

$-$$$20\mathrm{.}000$

$7,070$

$7\mathrm{.}070$

$7,070$

$7,070$

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$.15\mathrm{.}25$ and final answers to $4$ decimal places, e$.$g$.1\mathrm{.}2527.)$

The PI for project X is

and the PI for project Y is

Which project, or projects, should be accepted if you have unlimited funds to invest?

If you have unlimited funds you should invest in

Which project should be accepted if they are mutually exclusive?

If they are mutually exclusive you should invest in