Question: You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate of 15 percent. Use Appendix B. Project X (DVDs

You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate of 15 percent. Use Appendix B.

Project X (DVDs of the Weather Reports)

($46,000 Investment)

Year Cash Flow

1

 23,000
2 21,000
3 22,000
4 21,000

Project Y (Slow-Motion Replays of Commercials)

($66,000 Investment)

Year Cash Flow
1 33,000
2 26,000
3 27,000
4 29,000

a. Calculate the profitability index for project X. (Round "PV Factor" to 3 decimal places. Round the final answer to 2 decimal places.) PI

b. Calculate the profitability index for project Y. (Round "PV Factor" to 3 decimal places. Round the final answer to 2 decimal places.) PI

c. Using the NPV method combined with the PI approach, which project would you select? Use a discount rate of 15 percent. Project Y Project X

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