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You are analyzing two proposed capital investments with the following cash flows: Year Project X Project Y o - $20,000 - $20,000 12,230 6,670 6,360
You are analyzing two proposed capital investments with the following cash flows: Year Project X Project Y o - $20,000 - $20,000 12,230 6,670 6,360 6,670 5,460 6,670 2,020 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 Pl for project X is and the Pl for project Yis 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
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