The Following Are The Cash Flows Of Two Projects: Year Project A Project B 0 −$360

The Following Are The Cash Flows Of Two Projects: Year Project A Project B 0 −$360

The following are the cash flows of two projects:

Year

Project A

Project B

0

−$360

−$360

1

190

260

2

190

260

3

190

260

4

190

 

a. If the opportunity cost of capital is 12%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

Project Profitability Index

A

B

b. Does the profitability index rank the projects correctly? Yes No

 


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