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You are thinking about setting up a fish farm in your pond. You can rig it up to farm Tilapia or Pollock, but not both.

You are thinking about setting up a fish farm in your pond. You can rig it up to farm Tilapia or Pollock, but not both. You have the following information on the two possibilities:

Type of Fish Farm Initial Cost Annual Cash Flow
Tilapia $1,000 $200
Pollock $1,800 $350

Each option will yield the annual cash flows for 10 years and then will be finished with no additional cost or revenue. If the required return is 8%, what is the PI of the incremental project that you would use to decide between these two types of fish farms? a.) 0.6468 b.) 0.3420 c.) 0.2581

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