Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B)
0 -$ -$ 359,000 45,500
1 36,000 23,100 2 56,000 21,100 3 56,000 18,600
4 431,000 13,700
Whichever project you choose, if any, you require a return of 14 percent on your investment. e-1. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Profitability index Project A ________
Project B ________