Question: Problem 12-25 You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate of 15 percent. Use Appendix B. Project

Problem 12-25 You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate of 15 percent. Use Appendix B. Project X (DVDs Project Y (Slow-Motion of the Weather Reports) Replays of Commercials) ($46, 000 Investment ) ($66,000 Investment) Year Cash Flow Year Cash Flow $23, 000 $33, 000 21, 000 26,000 W N 22, 000 27, 000 21 , 600 29, 000 a. Calculate the profitability index for project X. (Round "PV Factor" to 3 decimal places. Round the final answer to 2 decimal places.) PI b. Calculate the profitability index for project Y. (Round "PV Factor" to 3 decimal places. Round the final answer to 2 decimal places.) PI c. Using the NPV method combined with the PI approach, which project would you select? Use a discount rate of 15 percent. O Project Y O Project X

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