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27 Nov 2019
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 13 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)
($28,000 Investment) Project Y (Slow-Motion
Replays of Commercials)
($48,000 Investment) Year Cash Flow Year Cash Flow 1 $ 14,000 1 $ 24,000 2 12,000 2 17,000 3 13,000 3 18,000 4 12,600 4 20,000
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
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 13 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) ($28,000 Investment) | Project Y (Slow-Motion Replays of Commercials) ($48,000 Investment) | |||||||||
Year | Cash Flow | Year | Cash Flow | |||||||
1 | $ | 14,000 | 1 | $ | 24,000 | |||||
2 | 12,000 | 2 | 17,000 | |||||||
3 | 13,000 | 3 | 18,000 | |||||||
4 | 12,600 | 4 | 20,000 | |||||||
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.)
|
c. Which project would you select?
Project X | |
Project Y |
20 Dec 2021
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Jamar FerryLv2
7 Jun 2019
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