just c.

2. Problems with Profitability Index The Moby Computer Corporation is try- ing to choose between the following two mutually exclusive design projects: Year 0 1 2 3 Cash Flow (1) -$20,000 10,000 10,000 10,000 Cash Flow (11) -$3,000 2,500 2,500 2,500 a. If the required return is 9 percent and Moby Computer applies the profitabil- ity index decision rule, which project should the firm accept? b. If the company applies the NPV decision rule, which project should it take? c. Explain why your answers in (a) and (b) are different