The following are the cash flows of two projects: ...
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Accounting
| The following are the cash flows of two projects: |
| Year | Project A | Project B |
| 0 | $330 | $330 |
| 1 | 160 | 230 |
| 2 | 160 | 230 |
| 3 | 160 | 230 |
| 4 | 160 | |
| a. | If the opportunity cost of capital is 12%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.) |
| Project | Profitability Index |
| A | |
| B | |
| b. | Does the profitability index rank the projects correctly? | ||||
|
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