You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate of 12 percent. Use Appendix B.

Project X (DVDs of the Weather Reports) ($26,000 Investment)

Project Y (Slow-Motion Replays of Commercials) ($46,000 Investment)

Year Cash Flow Year Cash Flow 1 $13,000 1 $23,000 2 11,000 2 16,000 3 12,000 3 17,000 4 11,600 4 19,000

a. Calculate the profitability index for project X. (Round "PV Factor" to 3 decimal places. Round the final answer to 2 decimal places.)

PI

b. Calculate the profitability index for project Y. (Round "PV Factor" to 3 decimal places. Round the final answer to 2 decimal places.)

PI

c. Using the NPV method combined with the PI approach, which project would you select? Use a discount rate of 12 percent.

multiple choice Project Y Project X