The Angry Bird Corporation is trying to choose between the following two mutuall

ID: 2777856 • Letter: T

Question

The Angry Bird Corporation is trying to choose between the following two mutually exclusive design projects:

If the required return is 10 percent, what is the profitability index for both projects? (Round your answers to 3 decimal places. (e.g., 32.161))

If the company applies the profitability index decision rule, which project should the firm accept?

What is the NPV for both projects? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16))

If the company applies the NPV decision rule, which project should it take?

Year Cash Flow (I) Cash Flow (II) 0 –$ 55,000 –$ 18,900 1 25,000 10,150 2 25,000 10,150 3 25,000 10,150

The Angry Bird Corporation is trying to choose between the following two mutuall

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