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26 Nov 2019
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)
($22,000 Investment) Project Y (Slow-Motion
Replays of Commercials)
($42,000 Investment) Year Cash Flow Year Cash Flow 1 $ 11,000 1 $ 21,000 2 9,000 2 14,000 3 10,000 3 15,000 4 9,600 4 17,000
a. Calculate the profitability index for project X. (Do not round intermediate calculations and round your answer to 2 decimal places.)
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
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) ($22,000 Investment) | Project Y (Slow-Motion Replays of Commercials) ($42,000 Investment) | |||||||||
Year | Cash Flow | Year | Cash Flow | |||||||
1 | $ | 11,000 | 1 | $ | 21,000 | |||||
2 | 9,000 | 2 | 14,000 | |||||||
3 | 10,000 | 3 | 15,000 | |||||||
4 | 9,600 | 4 | 17,000 | |||||||
a. Calculate the profitability index for project X. (Do not round intermediate calculations and round your answer to 2 decimal places.)
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 |
18 Dec 2021
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Jarrod RobelLv2
26 Nov 2019
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