Find net present value and profitability index

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Question 1: McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $543,000, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $74,600. Project B will cost $319,000, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $45,600. A discount rate of 7% is appropriate for both projects.

Question 1: Net present value - Project A ?

Question 2: Profitability index - Project A ?

Question 3: Net present value - Project B ?

Question 4: Profitability index - Project B ?

Reference no: EM132533939

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