Use the NPV method to determine whether Farran Company should invest in the following projects:

• Project A: Costs $250,000 and offers six annual net cash inflows of $75,000. Farran Company requires an annual return of 16% on investments of this nature.

• Project B: Costs $450,000 and offers 10 annual net cash inflows of $90,000. Farran Company demands an annual return of 14% on investments of this nature.

Requirements 

1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places.

2. What is the profitability index of each project? Round to two decimal places.