CoronadoCompany is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $436,000, has an expected useful life of12years and a salvage value of zero, and is expected to increase net annual cash flows by $72,000. Project B will cost $269,000, has an expected useful life of12years and a salvage value of zero, and is expected to increase net annual cash flows by $47,000. A discount rate of10% is appropriate for both projects. Click here to view the factor table. Calculate the net present value and profitability index of each project.(If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round present value answers to 0 decimal places, e.g. 125 and profitability index answers to 2 decimal places, e.g. 15.52. For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124.)

		Project A		Project B
Net present value		$enter a dollar amount rounded to 0 decimal places Incorrect answer		$enter a dollar amount rounded to 0 decimal places Incorrect answer
Profitability index		enter the index rounded to 2 decimal placesIncorrect answer		enter the index rounded to 2 decimal placesCorrect answer

Which project should be accepted based on net present value?

select a project Project B Project A

should be accepted.

Which project should be accepted based on profitability index?

select a project Project A Project B Correct answer

should be accepted.