$($CHAPTER $9)$

Your company has extra cash which it would like to use to invest into something new and profitable. There are two mutually exclusive projects under consideration.

Project #$1$ will require an initial investment of $$820,$ and the present value of all of its future estimated profits is $$920.$

Project #$2$ will require an initial investment of $$1,120,$ and the present value of all of its future estimated profits is $$1,230.$

Based on this information, answer the following questions.

$($a$)$ For Project #$1,$ the Profitability Index equals Round to

TWO decimal places, for example, $1\mathrm{.}23$

$($b$)$ For Project #$2,$ the Profitability Index equals Round to TWO decimal places, for example, $1\mathrm{.}23$

$($c$)$ Based on the Profitability Indexes, your company should

$($type accept or reject$)$ Project #$1$ and $($type accept or reject$)$ Project #$2.$