I took a screenshot, help? The Angry Bird Corporation is trying to choose betwee
ID: 2697030 • Letter: I
Question
I took a screenshot, help?
The Angry Bird Corporation is trying to choose between the following two mutually exclusive design projects: If the required return is 12 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?.Explanation / Answer
a-1 Profitable Index
Project I = 74456.77/68000 = 1.095
Project II = 22817.40/17600 = 1.296
a-2 If the company applies the Profitable Index decision rue
Project II should be accepted
b-1 NPV
Project I = 74456.77-68000 = $ 6456.77
Project II = 22817.40-17600 = $ 5217.40
a-2 If the company applies the NPV decision rue
Project I should be accepted