A new computer system will require an initial outlay of $17,500, but it will increase the firm's cash flows by $3,500 a year for each of the next 8 years.

a.Calculate the NPV and decide if the system is worth installing if the required rate of return is9%.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Net present value

worth installing

b.Calculate the NPV and decide if the system is worth installing if the required rate of return is14%.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Net present value

worth installing

c.How high can the discount rate be before you would reject the project?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Maximum discount rate %

The following are the cash flows of two projects:

YearProject A Project B

0-$ 280-$ 280

1160 180

2 160 180

3 160 180

4 160

If the opportunity cost of capital is 10%, what is the profitability index for each project?(Do not round intermediate calculations. Round your answers to 4 decimal places.)

ProjectProfitability index

A

B