You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate of 11 percent. Use Appendix B.

Project X (DVDs of the Weather Reports) ($40,000 Investment)					Project Y (Slow-Motion Replays of Commercials) ($60,000 Investment)
Year	Cash Flow				Year	Cash Flow
1		$20,000			1		$30,000
2		18,000			2		23,000
3		19,000			3		24,000
4		18,600			4		26,000

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 11 percent.

Project Y

Project X