Question: Consider the following projects: Project C 0 C 1 C 2 A $ 2 , 1 5 0 + $ 2 , 0 5 0

Consider the following projects:
Project C0 C1 C2
A $ 2,150+$ 2,050+$ 1,250
B 2,150+1,490+1,738
a. Calculate the profitability index for A and B assuming a 21% opportunity cost of capital.
Note: Do not round intermediate calculations. Round your answers to 4 decimal places.
b. According to the profitability index rule, which project(s) should you accept?
multiple choice
o Project A
o Project B
o Both
o Neither

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