Calculate profitability index for project

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Reference no: EM132041840

You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 13 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) ($44,000 Investment) Project Y (Slow-Motion Replays of Commercials) ($64,000 Investment) Year Cash Flow Year Cash Flow 1 $ 22,000 1 $ 32,000 2 20,000 2 25,000 3 21,000 3 26,000 4 20,600 4 28,000 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

Reference no: EM132041840

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