Problem 5-15 Profitability index

Consider the following projects:

Project	C0	C1
D	(10,300.00)	20,600.00
E	(20,300.00)	35,525.00

Assume that the projects are mutually exclusive and that the opportunity cost of capital is 9%.

a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b-2. Which project should you choose?

Problem 5-15 Profitability index Consider the following projects: Project D E Cash Flows ($) -10,300 -20,300 C1 20,600 35,525 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 9%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project D Profitability Index E b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitability-index b-2. Which project should you choose? Project D O Project E