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You are analyzing two proposed capital investments with thefollowing cash flows:YearProject XProject Y0-$20,000-$20,000113,6307,72025,8607,72036,1607,7204 2,0207,720The cost of capital for both projects is 10 percent.Calculate the profitability index (PI) for each project. (Do notround discount factors. Round intermediate calculations to 2decimal places, e.g. 15.25 and final answer to 4 decimal places,e.g. 1.2527.)1) What is the PI for project X?2) What is the PI for project Y?3) If you have unlimited funds you should invest in..?a) neither projectb) Project Yc) Project Xd) Both projects4) If they are mutually exclusive you should invest in...?a) neither projectb) Project Yc) Project X
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