Question: Consider projects A and B with the following cash flows: C 0 C 1 C 2 C 3 A $ 43 +$ 27 +$ 27

Consider projects A and B with the following cash flows:

C0 C1 C2 C3
A $ 43 +$ 27 +$ 27 +$ 27
B 68 +37 +37 +37

a-1.What is the NPV of each project if the discount rate is 10%?

Note: Do not round intermediate calculations. Round your answers to 2 decimal places.

a-2. Which project has the higher NPV?

b-1. What is the profitability index of each project?

Note: Do not round intermediate calculations. Round your answers to 2 decimal places.

a-2. Which project has the higher NPV?

b-2. Which project has the higher profitability index?

c. Which project is most attractive to a firm that can raise an unlimited amount of funds to pay for its investment projects?

d. Which project is most attractive to a firm that is limited in the funds it can raise?

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