Problem $9-16$ Problems with Profitability Index $[$LO$1,7]$

The Yoo Corporation is trying to choose between the following two mutually exclusive design projects:

YearCash Flow $($I$)$Cash Flow $($II$)0$$ $65,000$$ $17,900130,0009,650230,0009,650330,0009,650$

a$-1.$ If the required return is $12$ percent, what is the profitability index for both projects?

Note: Do not round intermediate calculations and round your answers to $3$ decimal places, e$.$g$.,32\mathrm{.}161.$

a$-2.$ If the company applies the profitability index decision rule, which project should the firm accept?

multiple choice $1$

Project I

Project Il

b$-1.$ What is the NPV for both projects?

Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

b$-2.$ If the company applies the NPV decision rule, which project should it take?

multiple choice $2$

Project I

Project II