You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of $12$ percent. Use Appendix B for

an approximate answer but calculate your final answer using the formula and financial calculator methods.

Project X $($Videotapes of Project Y $($Slow$-$Motion

the Weather Report$)$ Replays of Commercials$)$

$($$$26,000$ Investment$)($$$46,000$ Investment$)$

Year Cash Flow year Cash Flow

$1$ $$13,0001$ $$23,000$

$2$ $$11,0002$ $$16,000$

$3$ $$12,0003$ $$17,000$

$4$ $$11,6004$ $$19,000$

a$.$ Calculate the profitability index for project X$.$

Note: Do not round intermediate calculations and round your answer to $2$ decimal places.

Profitability index $\_\_\_\_\_\_\_\_\_\_\_\_\_$

b$.$ Calculate the profitability index for project Y$.$

Note: Do not round intermediate calculations and round your answer to $2$ decimal places.

Profitability index $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

c$.$ Which project would you select based on the profitability index?

o Project X

o Project Y