Current Attempt in Progress

Ivanhoe Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $$448,000,$ has an expected useful life of $12$ years and a salvage value of zero, and is expected to increase net annual cash flows by $$69,500.$ Project B will cost $$290,000,$ has an expected useful life of $12$ years and a salvage value of zero, and is expected to increase net annual cash flows by $$46,400.$ A discount rate of $9\%$ is appropriate for both projects. Click here to view PV table.

Compute the net present value and profitability index of each project. $($If the net present value is negative, use either a negative sign preceding the number eg $-45$ or parentheses eg $(45).$ Round present value answers to $0$ decimal places, e$.$g$.125$ and profitability index answers to $2$ decimal places, e$.$g$.15\mathrm{.}25.$ For calculation purposes, use $5$ decimal places as displayed in the factor table provided.$)$

Net present value $-$ Project $A$ $ $$

Profitability index $-$ Project $A$

Net present value $-$ Project B

$ $$

Profitability index $-$ Project B $$

Which project should be accepted based on Net Present Value?

$$ should be accepted.

Which project should be accepted based on profitability index?

$$