Question: Consider the following projects: Cash Flows ($) Project C 0 C 1 D 11,500 23,000 E 21,500 37,625 Assume that the projects are mutually exclusive

Consider the following projects:

Cash Flows ($)
Project	C₀	C₁
D	11,500	23,000
E	21,500	37,625

Assume that the projects are mutually exclusive and that the opportunity cost of capital is 10%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b-2. Which project should you choose?

multiple choice

Project D

Project E

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