Calculate the net present value and profitability index

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Question - Using my free remaining questions for an open assignment that's due 12 pm! Please help :'(

Jonczyk Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $532,000, has an expected useful life of 14 years and a salvage value of zero, and is expected to increase net annual cash flows by $71,000. Project B will cost $351,000, has an expected useful life of 14 years and a salvage value of zero, and is expected to increase net annual cash flows by $49,000. A discount rate of 8% is appropriate for both projects. Click here to view PV table.

Required -

Calculate the net present value and profitability index of each project.

Which project should be accepted based on net present value?

Which project should be accepted based on profitability index?

Reference no: EM132524542

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