The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow () Cash Flow ( -$ 63,000 32,000 32,000 32,000 -$ 18,100 9,750 9,750 9,750 3. -1.f the required return is 11 percent, what is the profitability index for both projects? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project
The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow () Cash Flow ( -$ 63,000 32,000 32,000 32,000 -$ 18,100 9,750 9,750 9,750 3. -1.f the required return is 11 percent, what is the profitability index for both projects? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![Problem 9-16 Problems with Profitability Index [LO1, 7]
The Michner Corporation is trying to choose between the following two mutually
exclusive design projects:
Vear Cash Flow (0) Cash Flow (
-24
63,000
32,000
32,000
32,000
-$
18,100
9,750
9,750
9,750
3
a-1.If the required return is 11 percent, what is the profitability index for both projects?
(Do not round intermediate calculations and round your answers to 3 decimal
places, e.g., 32.161.)
Project I
Project I|
a- If the company applies the profitability index decision rule, which project should the
2. firm accept?
O ProjectI
O Project I
b- What is the NPV for both projects? (A negative answer should be indicated by a
1. minus sign. Do not round Intermediate calculations and round your answers to 2
decimal places, e.g., 32.16.)
Project i
Project I
b-
if the company applies the NPV decision rule, which project should it take?
2.
Project I
O Project I](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb6752229-a370-4d85-9f04-9d3ee695d58a%2Fc18c768a-f771-4718-ac01-83a76e0f246f%2Flhjz28o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 9-16 Problems with Profitability Index [LO1, 7]
The Michner Corporation is trying to choose between the following two mutually
exclusive design projects:
Vear Cash Flow (0) Cash Flow (
-24
63,000
32,000
32,000
32,000
-$
18,100
9,750
9,750
9,750
3
a-1.If the required return is 11 percent, what is the profitability index for both projects?
(Do not round intermediate calculations and round your answers to 3 decimal
places, e.g., 32.161.)
Project I
Project I|
a- If the company applies the profitability index decision rule, which project should the
2. firm accept?
O ProjectI
O Project I
b- What is the NPV for both projects? (A negative answer should be indicated by a
1. minus sign. Do not round Intermediate calculations and round your answers to 2
decimal places, e.g., 32.16.)
Project i
Project I
b-
if the company applies the NPV decision rule, which project should it take?
2.
Project I
O Project I
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