Question: 2. (20 points) You are asked to choose between two mutually exclusive projects. The market rate of return is 14%. For both projects cash streams

2. (20 points) You are asked to choose between two mutually

2. (20 points) You are asked to choose between two mutually exclusive projects. The market rate of return is 14%. For both projects cash streams begin today (period zero) if you undertake them. For the first project the cash stream is (for years 0 through 3): -$750, $310, $430,$330 For the second project, cash stream is: -$2100, $1200, $760, $850 a) If these are independent projects and you do not have a budget constraint, which project(s) would you accept using Profitability Index criteria? b) If projects are mutually exclusive, which project would you pick if any, using the Profitability Index criteria

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