Consider the following two projects: (a) Calculate the profitability index for A1 and A2 at an interest
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(a) Calculate the profitability index for A1 and A2 at an interest rate of 6%.
(b) Determine which project(s) you should accept (1) if you have enough money to undertake both and (2) if you could take only one due to a budget limit.
Transcribed Image Text:
Project A1 Project A2 Investment $900,000 $1,200,000 Required at n = 0 $400,000 $200,000 $340,000 $300,000 $300,000 $350,000 3 $240,000 $440,000 4 $200,000 $400,000 5 $150,000 $350,000
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