Calculate the profitability index for each investment

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It is considering investments in three different technologies to develop wireless communication devices. Consider the following cash flows of the three independent projects available to the company. Assume the discount rate for all projects is 9 percent. Further, the company has only $20 million to invest in new projects this year. Cash Flows (in $ millions) Year CDMA G4 Wi-Fi

0 –$ 6 –$ 14 –$ 20

1) 11 11 17

2) 8.5 25 33

3) 3.5 20 20

a. Calculate the profitability index for each investment. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Profitability index CDMA G4 Wi-Fi b. Calculate the NPV for each investment. (Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) NPV CDMA $ G4 $ Wi-Fi $

Reference no: EM131985705

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