Current Attempt in Progress

You are analyzing two proposed capital investments with the following cash flows:

Year		Project X		Project Y
0		- $20,000		- $20,000
1		12,530		6,570
2		6,360		6,570
3		6,160		6,570
4		2,020		6,570

The cost of capital for both projects is 10 percent. Calculate the profitability index (PI) for each project. (Do not round discount factors. Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answer to 4 decimal places, e.g. 1.2527.)

The PI for project X is enter the profitability index for project X rounded to 4 decimal places and the PI for project Y is enter the profitability index for project Y rounded to 4 decimal places .

Which project, or projects, should be accepted if you have unlimited funds to invest?

If you have unlimited funds you should invest in select a project both projectsproject Yneither projectproject X.

Which project should be accepted if they are mutually exclusive?

If they are mutually exclusive you should invest in select a project neither projectProject YProject X.