Question: This is my second time posting the same exact question. Please provide me with an accurate solution. Thank you. Cori's Sausage Corporation is trying to
This is my second time posting the same exact question. Please provide me with an accurate solution. Thank you.
| Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: |
| Year | Cash Flow (I) | Cash Flow (II) | |||||
| 0 | $ | 64,000 | $ | 38,800 | |||
| 1 | 28,900 | 17,600 | |||||
| 2 | 28,900 | 17,600 | |||||
| 3 | 28,900 | 17,600 | |||||
| a-1. | If the required return is 11 percent, what is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) |
| a-2. | If the company applies the profitability index decision rule, which project should the firm accept? |
multiple choice 1
|
| b-1. | What is the NPV for each project? (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., 32.16.) |
| b-2. | If the company applies the NPV decision rule, which project should it take? |
multiple choice 2
|
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