Question: You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 10 percent. Use Appendix B for an

You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 10 percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project X (Videotapes of the Weather Report) ($34,000 Investment) Project Y (Slow-Motion Replays of Commercials) ($54,000 Investment) Year Cash Flow Year Cash Flow 1 $ 17,000 1 $ 27,000 2 15,000 2 20,000 3 16,000 3 21,000 4 15,600 4 23,000

Project X (Videotapes of the Weather Report) ($34,000 Investment)			Project Y (Slow-Motion Replays of Commercials) ($54,000 Investment)
Year	Cash Flow		Year	Cash Flow
1	$	17,000	1	$	27,000
2		15,000	2		20,000
3		16,000	3		21,000
4		15,600	4		23,000

a. Calculate the profitability index for project X. (Do not round intermediate calculations and round your answer to 2 decimal places.)

b. Calculate the profitability index for project Y. (Do not round intermediate calculations and round your answer to 2 decimal places.)

c. Which project would you select based on the profitability index? multiple choice Project X Project Y

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