Calculate the profitability index for project

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Reference no: EM131022510

You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 14 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) ($30,000 Investment) Project Y (Slow-Motion Replays of Commercials) ($50,000 Investment) Year Cash Flow Year Cash Flow 1 $ 15,000 1 $ 25,000 2 13,000 2 18,000 3 14,000 3 19,000 4 13,600 4 21,000 a. Calculate the profitability index for project X. (Do not round intermediate calculations and round your answer to 2 decimal places.) Profitability index b. Calculate the profitability index for project Y. (Do not round intermediate calculations and round your answer to 2 decimal places.) Profitability index c. Which project would you select? Project X Project Y

Reference no: EM131022510

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