The Sloan Corporation is trying to choose between the following two mutually exclusive design projects:
Year Cash Flow
(I) Cash Flow
(II) 0 â$ 56,000 â$ 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
a-2 If the company applies the profitability index decision rule, which project should the firm accept?
Project I Project Il
b-1 What is the NPV for both projects? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
NPV Project I $ Project II $
b-2 If the company applies the NPV decision rule, which project should it take?
Project I Project II
| The Sloan Corporation is trying to choose between the following two mutually exclusive design projects: |
| Year | Cash Flow (I) | Cash Flow (II) | |||||
| 0 | â$ | 56,000 | â$ | 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 | ||
| a-2 | If the company applies the profitability index decision rule, which project should the firm accept? | ||||
|
| b-1 | What is the NPV for both projects? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| NPV | ||
| Project I | $ | |
| Project II | $ | |
| b-2 | If the company applies the NPV decision rule, which project should it take? | ||||
|
Related questions
The Sloan Corporation is trying to choose between the following two mutually exclusive design projects:
| Year | Cash Flow (I) | Cash Flow (II) | |||||
| 0 | â$ | 55,000 | â$ | 18,900 | |||
| 1 | 25,000 | 10,150 | |||||
| 2 | 25,000 | 10,150 | |||||
| 3 | 25,000 | 10,150 | |||||
| a-1 | If the required return is 10 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 | ||
| a-2 | If the company applies the profitability index decision rule, which project should the firm accept? | ||||
|
| b-1 | What is the NPV for both projects? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| NPV | ||
| Project I | $ | |
| Project II | $ | |
| b-2 | If the company applies the NPV decision rule, which project should it take? | ||||
|
| The Sloan Corporation is trying to choose between the following two mutually exclusive design projects: |
| Year | Cash Flow (I) | Cash Flow (II) | |||||
| 0 | â$ | 74,000 | â$ | 17,000 | |||
| 1 | 34,000 | 9,200 | |||||
| 2 | 34,000 | 9,200 | |||||
| 3 | 34,000 | 9,200 | |||||
| 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 | ||
| a-2 | If the company applies the profitability index decision rule, which project should the firm accept? | ||||
|
| b-1 | What is the NPV for both projects? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| NPV | ||
| Project I | $ | |
| Project II | $ | |
| b-2 | If the company applies the NPV decision rule, which project should it take? | ||||
|
