You are evaluating two independent projects with the following cash flows:YearProject XProject Y0-$5,000,000-$3,000,0001$1,500,000$1,000,0002$2,000,000$1,200,0003$2,500,000$1,500,0004$3,000,000$2,000,000Requirements:a. Calculate the...
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Accounting
You are evaluating two independent projects with the following cash flows:
Year
Project X
Project Y
0
-$5,000,000
-$3,000,000
1
$1,500,000
$1,000,000
2
$2,000,000
$1,200,000
3
$2,500,000
$1,500,000
4
$3,000,000
$2,000,000
Requirements:
a. Calculate the NPV of each project using a discount rate of 12%. b. Determine the profitability index for each project. c. Identify which project is better based on NPV. d. Should both projects be accepted if they are independent?
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