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?
Yes
No
Answer & Explanation
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