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Sunland Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost...

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Accounting

Sunland Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $448,000, has an expected useful life of 11 years and a salvage value of zero, and is expected to increase net annual cash flows by $73,100. Project Bwill cost $299,000, has an expected useful life of 11 years and a salvage value of zero, and is expected to increase net annual cash flows by $50,300. A discount rate of 9% is appropriate for both projects. Click here to view PV table.
Compute the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to 0 decimal places, e.g.125 and profitability index answers to 2 decimal places, e.g.15.25. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Net present value-Project A $
Profitability index-Project A
Net present value - Project B
$
Profitability index - Project B
Which project should be accepted based on Net Present Value?
should be accepted.
Which project should be accepted based on profitability index?
should be accepted.
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