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Hi all, Can someone please answer this question. Please list all steps! Thanks! Consider the following projects: Cash Flows ($) Project C0 C1 D –10,300 20,600 E –20,300 35,525 Assume...

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Finance

Hi all,

Can someone pleaseanswer this question. Please list all steps! Thanks!

Consider the followingprojects:

Cash Flows ($)
ProjectC0C1
D–10,30020,600
E–20,30035,525

Assume that theprojects are mutually exclusive and that the opportunity cost ofcapital is 9%.

a.Calculate the profitability index for each project. (Do notround intermediate calculations. Round your answers to 2 decimalplaces.)

ProjectProfitabilityIndex
D
E

b-1.Calculate the profitability-index using the incremental cash flows.(Do not round intermediate calculations. Round your answerto 2 decimal places.)

Profitability-index           

b-2.Which project should you choose?

ProjectD
ProjectE

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Transcribed Image Text

Hi all,Can someone pleaseanswer this question. Please list all steps! Thanks!Consider the followingprojects:Cash Flows ($)ProjectC0C1D–10,30020,600E–20,30035,525Assume that theprojects are mutually exclusive and that the opportunity cost ofcapital is 9%.a.Calculate the profitability index for each project. (Do notround intermediate calculations. Round your answers to 2 decimalplaces.)ProjectProfitabilityIndexDEb-1.Calculate the profitability-index using the incremental cash flows.(Do not round intermediate calculations. Round your answerto 2 decimal places.)Profitability-index           b-2.Which project should you choose?ProjectDProjectE

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