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

Year		Project X		Project Y
0		- $20,000		- $20,000
1		12,730		6,670
2		5,660		6,670
3		6,260		6,670
4		1,820		6,670

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.)

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

a. Project Y

b. Project X

c. Both Projects

d. Neither Projects

Which project should be accepted if they are mutually exclusive?

If they are mutually exclusive you should invest in____________

a. Project X

b. Project Y

c. neither project