Calculate profitability-index using incremental cash flows

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Reference no: EM132070894

Consider the following projects: Cash Flows ($) Project C0 C1 D –11,000 22,000 E –21,000 36,750 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 10%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index D 1.56 E b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitability-index b-2. Which project should you choose? Project D Project E.

Reference no: EM132070894

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