Question: Albemarle is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (!) Cash Flow (I|) 1 $1,000 600 $1,200 700

Albemarle is trying to choose between the following two mutually exclusive design projects:

Year

Cash Flow (!) Cash Flow (I|)

1

  • $1,000 600
  • $1,200 700

2

650

805

What is the profitability index for the Cash Flow (I) above if th discount rate is 12 percent?

1.06

O 1.03

O 1.05

O 1.04

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