You are asked to evaluate the following two projects for the Norton corporation. Use a discount...

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Finance

You are asked to evaluate the following two projects for theNorton corporation. Use a discount rate of 14 percent. Use AppendixB for an approximate answer but calculate your final answer usingthe formula and financial calculator methods. Project X (Videotapesof the Weather Report) ($20,000 Investment) Project Y (Slow-MotionReplays of Commercials) ($40,000 Investment) Year Cash Flow YearCash Flow 1 $ 10,000 1 $ 20,000 2 8,000 2 13,000 3 9,000 3 14,000 48,600 4 16,000 a. Calculate the profitability index for project X.(Do not round intermediate calculations and round your answer to 2decimal plac es.) b. Calculate the profitability index for projectY. (Do not round intermediate calculations and round your answer to2 decimal places.) c. Which project would you select? Project XProject Y

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aProfitability Index PI for Project X Videotapes of the Weather Report Year Annual cash inflow Present Value factor at 1400 Present Value of Annual cash inflow 1 10000 0877193 877193 2 8000 0769468 615574 See Answer

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You are asked to evaluate the following two projects for theNorton corporation. Use a discount rate of 14 percent. Use AppendixB for an approximate answer but calculate your final answer usingthe formula and financial calculator methods. Project X (Videotapesof the Weather Report) ($20,000 Investment) Project Y (Slow-MotionReplays of Commercials) ($40,000 Investment) Year Cash Flow YearCash Flow 1 $ 10,000 1 $ 20,000 2 8,000 2 13,000 3 9,000 3 14,000 48,600 4 16,000 a. Calculate the profitability index for project X.(Do not round intermediate calculations and round your answer to 2decimal plac es.) b. Calculate the profitability index for projectY. (Do not round intermediate calculations and round your answer to2 decimal places.) c. Which project would you select? Project XProject Y