Company X is considering two projects, E and F Project E costs $900 and has future cash flows of $400, $450, and $500 over the next three years Project F costs $1,000 and has cash flows of $300, $500, and $700 for the next three years Compute the net present value for each project at a discount rate of 8 Determine which project has a higher NPV Calculate the profitability index for both projects Identify the project with the better profitability index and justify the decision

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Question: Company X is considering two projects, E and F. Project E costs $900 and has future cash flows of $400, $450, and $500 over the

Company X is considering two projects, E and F. Project E costs $900 and has future cash flows of $400, $450, and $500 over the next three years. Project F costs $1,000 and has cash flows of $300, $500, and $700 for the next three years.

Compute the net present value for each project at a discount rate of 8%.
Determine which project has a higher NPV.
Calculate the profitability index for both projects.
Identify the project with the better profitability index and justify the decision.

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