You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 13 percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Project X (Videotapes of the Weather Report) ($52,000 Investment)	Project Y (Slow-Motion Replays of Commercials) ($72,000 Investment)
Year	Cash Flow	Year	Cash Flow
1	$ 26,000	1	$ 36,000
2	24,000	2	29,000
3	25,000	3	30,000
4	24,600	4	32,000

Calculate the profitability index for project X.

Note: Do not round intermediate calculations and round your answer to 2 decimal places.

Calculate the profitability index for project Y.

Note: Do not round intermediate calculations and round your answer to 2 decimal places.

Which project would you select based on the profitability index?

1. multiple choice

Project X

Project Y