The Michner Corporation is trying to choose between the following two mutually exclusive design projects: YearCash Flow (I)Cash Flow (II)0−$ 70,000−$ 17,400131,5009,400231,5009,400331,5009,400 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.) a-2. If the company applies the profitability index decision rule, which project should the firm accept? multiple choice 1 Project I Project Il b-1. What is the NPV for both projects? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2. If the company applies the NPV decision rule, which project should it take? multiple choice 2 Project I Project II

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 13P
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The Michner Corporation is trying to choose between the following two mutually exclusive design projects: YearCash Flow (I)Cash Flow (II)0−$ 70,000−$ 17,400131,5009,400231,5009,400331,5009,400 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.) a-2. If the company applies the profitability index decision rule, which project should the firm accept? multiple choice 1 Project I Project Il b-1. What is the NPV for both projects? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2. If the company applies the NPV decision rule, which project should it take? multiple choice 2 Project I Project II
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