Question: Consider the following projects: Cash Flows ($) Project C0 C1 D 11,300 22,600 E 21,300 37,275 Assume that the projects are mutually exclusive and that

Consider the following projects: Cash Flows ($) Project C0 C1 D 11,300 22,600 E 21,300 37,275 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 9%.

a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Project Profitability Index

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

Profitability-index

b-2. Which project should you choose?

Project D

Project E

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