Question: Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 418,000 $ 36,500 1 47,500 19,700 2 58,500 14,000

Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 $ 418,000 $ 36,500
1 47,500 19,700
2 58,500 14,000
3 75,500 15,100
4 533,000 11,900

The required return on these investments is 14 percent.

b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Net present value
Project A $
Project B

$

d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)

Profitability index
Project A
Project B

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