1
answer
0
watching
506
views
25 Dec 2018
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 11 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)
($56,000 Investment)
Project Y (Slow-Motion
Replays of Commercials)
($76,000 Investment)
Year Cash Flow Year Cash Flow 1 $ 28,000 1 $ 38,000 2 26,000 2 31,000 3 26,000 3 32,000 4 20,600 4 34,000
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 11 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) ($56,000 Investment) | Project Y (Slow-Motion Replays of Commercials) ($76,000 Investment) | |||||||||
Year | Cash Flow | Year | Cash Flow | |||||||
1 | $ | 28,000 | 1 | $ | 38,000 | |||||
2 | 26,000 | 2 | 31,000 | |||||||
3 | 26,000 | 3 | 32,000 | |||||||
4 | 20,600 | 4 | 34,000 | |||||||
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? | ||||
|
Nelly StrackeLv2
25 Dec 2018