Projects Evaluation Assignment | Homework For You
June 9th, 2020
You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate of 15 percent. Use Appendix B.
Project X (DVDs of the Weather Reports)
($46,000 Investment)
| Year | Cash Flow |
| 1 | 23,000 |
| 2 | 21,000 |
| 3 | 22,000 |
| 4 | 21,000 |
Project Y (Slow-Motion Replays of Commercials)
($66,000 Investment)
| Year | Cash Flow |
| 1 | 33,000 |
| 2 | 26,000 |
| 3 | 27,000 |
| 4 | 29,000 |
a. Calculate the profitability index for project X. (Round “PV Factor” to 3 decimal places. Round the final answer to 2 decimal places.) PI
b. Calculate the profitability index for project Y. (Round “PV Factor” to 3 decimal places. Round the final answer to 2 decimal places.) PI
c. Using the NPV method combined with the PI approach, which project would you select? Use a discount rate of 15 percent. Project Y Project X. Get Finance homework help today
