QUESTION 14 Muffins co. is considering to modernize its production facilities and it...

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Accounting

QUESTION 14

  1. Muffins co. is considering to modernize its production facilities and it has two proposals under consideration. The expected cash flows associated with these projects is as follows. The discount rate associated with both the projects is 12%. Write that which proposal is better on the basis of profitability index . Write only 1 or 2

    Years

    Proposal 1- $

    Proposal 2- $

    0

    (40,000)

    (64000)

    1

    18000

    10000

    2

    24000

    32000

    3

    32000

    19000

    4

    11000

    25000

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