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What is the profitability index for project for mcartech pvt

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Reference no: EM132993368

MCARTECH Pvt. Ltd. is considering two mutually exclusive capital investments. The project's expected net cash flows are as follows:

Expected Cash Flows

Year Project A Project B

0 -500 -875

1 100 150

2 110 200

3 120 250

4 175 375

5 240 530

6 300 680

Problem a. If you were told that each project's cost of capital was 12%, which project should be selected using the NPV criteria?

Problem b. What is the profitability index for each project if the cost of capital is 12%?

Problem c. What is the regular payback period for these two projects?

Reference no: EM132993368

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