Two mutually exclusive design projects

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The Sloan Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II)

0 –$ 56,000 –$ 18,800

1 26,000 10,100

2 26,000 10,100

3 26,000 10,100

a-1 If the required return is 12 percent, what is the profitability index for both projects? (Do not round intermediate calculations. Round your answers to 3 decimal places, e.g., 32.161.)

Profitability Index

Project I :

Project II:

Reference no: EM13929999

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