1. Evaluate the following three projects, using the profitability index. Assume a cost of capital of 10%. Initial cash outflow Year 1 cash inflow Year 2 cash inflow Year 3 cash inflow Liquidate -$100,000 50,000 60,000 75,000 Project Recondition -$500,000 100,000 200,000 250,000 Replace -$1,000,000 500,000 500,000 500,000 Rank these projects by their Pls. b. If the projects are independent, which would you accept according to the P/ criterion? If these projects are mutually exclusive, which would you accept according to the P/ criterion? d. Apply the NPV criterion to the projects, rank them according to their NPVS, and indicate which project you would accept if they are independent and if they are mutually exclusiv e. Compare and contrast your answer to part (c) to your answer to part (d) for the mutually exclusive case. Explain this result.

1. Evaluate the following three projects, using the profatability index. Assume a cost of capital of 10 s. a. Aank these projects by their Pis. b. If the projects are independent, which would you accept according to the Pl criterion? c. If these projects are mutually exclusive, which would you accept according to the PV criterion? d. Apply the NPV criterion to the projects, rank them according to their NPVS, and indicate which project you would accept if they are independent and if they are mutually excluaiv e. Compare and contrast your answer to part (c) to your answer to part (d) for the mutually exclusive case. Explain this result