Question: Jonczyk Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $395,000, has an expected useful life of 10 years, a

Jonczyk Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $395,000, has an expected useful life of 10 years, a of zero, and is expected to increase net annual cash flows by $70,000. Project B will cost $270,000, has an expected useful life of 10 years, a of zero, and is expected to increase net annual cash flows by $50,000. A of 9% is appropriate for both projects. Calculate the net pres- ent value and profitability index of each project. Which project should be accepted?

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