Answer both please

Question 7 2.5 pts Same facts as above, but assume that the firm expands its investment such that the revenues will go up by 20%, but the discount rate will also increase to 16.5%. What is the new profitability index? O 1.64 1.36 0.64 1.40 Question 8 2.5 pts Same facts as Questions 6 and 7: Which of the following best describes how this project's Profitability Index changes based on the increase in revenues by 20% and a corresponding increase in the discount rate to 16.5%? The Profitability Index slightly increases because there are increase in revenues, which increases the Profitability Index, and increase in discount rate that does not affect the Profitability Index. The Profitability Index slightly increases because the increase in revenues is offset by the increase in the discount rate, since a higher discount rate decreases the Net Present Value and therefore the Profitability Index. The Profitability Index slightly decreases because the increase in discount rate overshadows any benefits form the increase in revenue. The Profitability Index slightly decreases because the increase in revenues does not affect the Profitability Index, while the increase in discount rate generally decreases the Profitability Index. Question 7 2.5 pts Same facts as above, but assume that the firm expands its investment such that the revenues will go up by 20%, but the discount rate will also increase to 16.5%. What is the new profitability index? O 1.64 1.36 0.64 1.40 Question 8 2.5 pts Same facts as Questions 6 and 7: Which of the following best describes how this project's Profitability Index changes based on the increase in revenues by 20% and a corresponding increase in the discount rate to 16.5%? The Profitability Index slightly increases because there are increase in revenues, which increases the Profitability Index, and increase in discount rate that does not affect the Profitability Index. The Profitability Index slightly increases because the increase in revenues is offset by the increase in the discount rate, since a higher discount rate decreases the Net Present Value and therefore the Profitability Index. The Profitability Index slightly decreases because the increase in discount rate overshadows any benefits form the increase in revenue. The Profitability Index slightly decreases because the increase in revenues does not affect the Profitability Index, while the increase in discount rate generally decreases the Profitability Index