Question: Problems with Profitability Index The Moby Computer Corporation is trying to choose between the following mutually exclusive design projects using a required return of 9%:

Problems with Profitability Index

The Moby Computer Corporation is trying to choose between the following mutually exclusive design projects using a required return of 9%:

Year

Cashflow (I)

Cashflow (II)

0

-1000000

-10000

1

410000

6800

2

410000

6800

3

410000

6800

The PI for Project I is_____.

The PI for Project II is______.

The NPV for Project I is $_______.

The NPV for Project II is $_______.

Using the PI decision rule, I would chose project___.

Using the NPV decision rule, I would chose project____.

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