Problem 9-16 Problems with Profitability Index [LO1, 7] The Michner Corporation is trying to choose between...

Transcribed Image Text:

Problem 9-16 Problems with Profitability Index [LO1, 7] The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (0) Cash Flow (II) $- -$17.100 73,000 33,000 9,250 33,000 9,250 33,000 9,250 a-1.If the required return is 11 percent, what is the profitability index for both projects? (Do not round Intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Answer is not complete. Project Project II a- If the company applies the profitability index decision rule, which project should the 2 firm accept? Project I Project II b- What is the NPV for both projects? (A negative answer should be Indicated by a 1. minus sign. Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project I Project II 2 If the company applies the NPV decision rule, which project should it take? Project I Project II Problem 9-16 Problems with Profitability Index [LO1, 7] The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (0) Cash Flow (II) $- -$17.100 73,000 33,000 9,250 33,000 9,250 33,000 9,250 a-1.If the required return is 11 percent, what is the profitability index for both projects? (Do not round Intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Answer is not complete. Project Project II a- If the company applies the profitability index decision rule, which project should the 2 firm accept? Project I Project II b- What is the NPV for both projects? (A negative answer should be Indicated by a 1. minus sign. Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project I Project II 2 If the company applies the NPV decision rule, which project should it take? Project I Project II