Aerospace Dynamics will invest $$205,000$You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of $14$ percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Project X $($Videotapes of the Weather Report$)($$$46,000$ Investment$)$ Project Y $($Slow$-$Motion Replays of Commercials$)($$$66,000$ Investment$)$

Year Cash Flow Year Cash Flow

$1$ $ $23,0001$ $ $33,000$

$221,000226,000$

$322,000327,000$

$421,600429,000$

Calculate the profitability index for project X$.$

Note: Do not round intermediate calculations and round your answer to $2$ decimal places.

Calculate the profitability index for project Y$.$

Note: Do not round intermediate calculations and round your answer to $2$ decimal places.

Which project would you select based on the profitability index?

multiple choice

Project X

Project Yin a project that will produce the following cash flows. The cost of capital is $11$ percent. $($Note that the fourth year$$s cash flow is negative.$)$ Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Year Cash Flow

$1$ $ $67,000$

$282,000$

$371,000$

$4(82,000)$

$5151,000$

What is the net present value of the project?

Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to $2$ decimal places.

Should the project be undertaken?

multiple choice

yes

no